When prices are increasing which inventory method will produce the highest cost of goods sold?

Question

Quizplus · Accepted Answer

LIFO (last-in, first-out) assumes that the most recently purchased inventory is sold first. During times of rising prices, the cost of the most recent inventory is higher, leading to a higher cost of goods sold and a lower net income. Therefore, LIFO would produce the highest cost of goods sold in this scenario.

When Prices Are Increasing Which Inventory Method Will Produce the Highest