Which of the following inventory costing methods yields the lowest net income during a period of rising inventory costs?

Question

Quizplus · Accepted Answer

In a period of rising inventory costs, the FIFO method results in a higher cost of goods sold and a lower ending inventory value compared to LIFO. Therefore, LIFO yields the lowest net income in this situation. Specific identification and weighted-average methods do not depend on the order in which inventory is sold, so they are not affected by rising inventory costs.

Which of the Following Inventory Costing Methods Yields the Lowest