The correct answer is: A. FIFO method.
The FIFO method stands for First-In, First-Out. It is a method of accounting for inventory that assumes that the first goods that are purchased are also the first goods that are sold. This means that the cost of goods sold is based on the cost of the oldest inventory items.
When prices are rising, the FIFO method will result in the highest cost of goods sold and the lowest ending inventory value. This is because the cost of the oldest inventory items will be higher than the cost of the newer inventory items.
The LIFO method stands for Last-In, First-Out. It is a method of accounting for inventory that assumes that the last goods that are purchased are also the first goods that are sold. This means that the cost of goods sold is based on the cost of the newest inventory items.
When prices are rising, the LIFO method will result in the lowest cost of goods sold and the highest ending inventory value. This is because the cost of the newest inventory items will be lower than the cost of the older inventory items.
The General average method is a method of accounting for inventory that uses a weighted average of the cost of all the inventory items on hand. This means that the cost of goods sold is based on the average cost of all the inventory items on hand.
The Weighted average method is not as commonly used as the FIFO or LIFO methods. However, it can be used when the cost of inventory items is constantly changing.
The answer to the question is A. FIFO method.