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

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

Quizplus · Accepted Answer

LIFO (Last-In, First-Out) assumes that the most recently acquired inventory is sold first. In a period of rising prices, this results in higher cost of goods sold and thus a smaller net income compared to other methods.

During a Year of Rising Prices and Increasing Inventory, Which