The correct answer is: A. LIFO method
Under the LIFO method, the last items purchased are the first items sold. This means that the cost of goods sold is based on the most recent prices, and the inventory balance is based on the oldest prices. In inflationary conditions, this results in a higher value of inventory being assigned under the LIFO method.
The FIFO method, on the other hand, assumes that the first items purchased are the first items sold. This means that the cost of goods sold is based on the oldest prices, and the inventory balance is based on the most recent prices. In inflationary conditions, this results in a lower value of inventory being assigned under the FIFO method.
The weighted average method is a hybrid of the LIFO and FIFO methods. It assumes that the cost of goods sold is based on an average of the prices of all the items purchased during the period. This method results in a value of inventory that is somewhere between the values assigned under the LIFO and FIFO methods.
In conclusion, under inflationary conditions, a higher value of inventory is assigned under the LIFO method.