Respuesta :
In periods of rising prices, the inventory method which results in the inventory value on the balance sheet that is closest to current cost is the FIFO method.
A period of rising prices is known as an inflationary period. In an inflationary period, the prices of goods and services increase.
There are three inventory methods:
- FIFO method: The first in, first out (FIFO) method assumes that the inventories purchases first are sold first and ending inventory is made up of the goods bought last.
- LIFO method: The last-in, first-out (LIFO) method assumes that the latest purchased inventories are the first to be sold and ending inventory consists of goods purchased first.
- The average cost method: this method makes use of the weighted average cost to determine the value of goods sold and ending inventory.
The balance sheet records ending inventory. In periods of rising prices, the FIFO method would result in inventory value closest to the current cost in the balance sheet.
A similar question was answered here: brainly.com/question/14938191?referrer=searchResults
