During periods of inflation which method will yield the smallest ending inventory and the largest cost of goods sold?
A) LIFO.
B) FIFO.
C) Average.
D) Specific identification.

Question

Quizplus · Accepted Answer

LIFO (Last-in, First-out) typically results in the smallest ending inventory and the largest cost of goods sold during periods of inflation because the cost of the most recently purchased items is higher than the cost of the older items in inventory, and LIFO assigns the most recent costs to the cost of goods sold.

During Periods of Inflation Which Method Will Yield the Smallest