During a year of rising prices and increasing inventory, which cost flow assumption would measure the smallest working capital ratio?

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

Quizplus · Accepted Answer

LIFO (Last-In, First-Out) results in higher cost of goods sold and lower ending inventory values during periods of rising prices, which decreases current assets and thus reduces the working capital ratio.

During a Year of Rising Prices and Increasing Inventory, Which