When inventory costs are declining,which of the following inventory costing methods will result in the highest cost of goods sold?

Question

Quizplus · Accepted Answer

When inventory costs are declining, the oldest (and presumably higher cost) inventory will be sold first under the FIFO method, while the most recent (and presumably lower cost) inventory will be sold last. Therefore, the cost of goods sold will be based on the higher costs of the older inventory, resulting in a higher cost of goods sold compared to the other inventory costing methods.

When Inventory Costs Are Declining,which of the Following Inventory Costing