Reported income for FIFO firms _________ includes some realized holding gains during periods of rising inventory costs.Which of the following terms (when inserted in the blank)makes the previous a true statement?

Question

Quizplus · Accepted Answer

FIFO firms report inventory at the cost of the oldest units purchased. During periods of rising inventory costs, the cost of the oldest units is lower than the cost of the most recently purchased units. Therefore, FIFO firms will report some realized holding gains during periods of rising inventory costs.

Reported Income for FIFO Firms _________ Includes Some Realized Holding