During a period of steadily rising prices, which inventory cost flow assumption results in reporting the highest inventory value?
A) Specific identification
B) Average cost
C) Moving weighted average
D) FIFO
E) Any of the above

Question

Quizplus · Accepted Answer

FIFO (first-in, first-out) assumes that the first items purchased are the first items sold, so the ending inventory consists of the most recently purchased and therefore more expensive items. During a period of rising prices, this method results in reporting the highest inventory value.

During a Period of Steadily Rising Prices, Which Inventory Cost