If inventory prices are rising the method of inventory valuation that gives the highest profit and the highest ending inventory is:

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) results in the highest profit and highest ending inventory value when prices are rising because it assumes that the oldest, cheaper inventory is sold first, leaving the more expensive, newer inventory on the balance sheet.

If Inventory Prices Are Rising the Method of Inventory Valuation