In periods of rising prices, the inventory method that results in the inventory amount on the balance sheet that is closest to current cost is the

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In periods of rising prices, the FIFO method results in the inventory amount on the balance sheet that is closest to current cost. This is because under FIFO, the oldest inventory items are sold first and therefore, the ending inventory consists of the most recently purchased (and presumably more expensive) items. This method results in a higher cost of goods sold, which lowers the reported net income and income taxes. However, it provides a more accurate valuation of inventory on the balance sheet.

In Periods of Rising Prices, the Inventory Method That Results