In a period of rising purchase prices,which cost flow assumption provides the highest net profit?

Name: In a period of rising purchase prices,which cost flow assumption provides the highest net profit?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

FIFO assumes that the first items purchased are the first ones sold, so the cost of goods sold reflects the older, lower purchase prices. This results in higher net profit because the cost of goods sold is lower than the cost of goods purchased.

In a Period of Rising Purchase Prices,which Cost Flow Assumption