Which of the following inventory costing methods results in the lowest value of ending inventory during a period of rising inventory costs?

Question

Quizplus · Accepted Answer

Last-in, first-out (LIFO) results in the lowest value of ending inventory during a period of rising inventory costs because the cost of the most recent inventory purchases are used first to calculate the cost of goods sold, leaving the older, cheaper inventory to be valued at the end of the period. This results in a lower value of ending inventory than first-in, first-out (FIFO) and weighted-average methods. Specific identification can result in even lower ending inventory values, but it is not a practical method for most businesses as it requires the ability to identify and track the cost of each individual item in inventory.

Which of the Following Inventory Costing Methods Results in the Lowest