During a year of rising prices and increasing inventory, which cost flow assumption would measure the smallest net income?

Question

Quizplus · Accepted Answer

LIFO assumes that the last items purchased are sold first, which means that the cost of goods sold will reflect the higher prices of the most recent inventory purchases. This leads to a lower net income due to the increased cost of goods sold. In a year of rising prices and increasing inventory, LIFO will result in the smallest net income.

During a Year of Rising Prices and Increasing Inventory, Which