📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!

    Question

    Which inventory valuation method tends to show higher

    profits during inflation?
    A FIFO Correct Answer Incorrect Answer
    B LIFO Correct Answer Incorrect Answer
    C Weighted average Correct Answer Incorrect Answer
    D Specific identification Correct Answer Incorrect Answer

    Solution

    During inflation, FIFO (First-In, First-Out) assigns older, lower costs to Cost of Goods Sold (COGS), resulting in a lower COGS and consequently a higher reported profit compared to other methods like LIFO.

    Practice Next
    More Accounts Questions
    ask-question