[amp_mcq option1=”L.I.F.O. basis” option2=”F.I.F.O. basis” option3=”Simple average price” option4=”Weighted average price” correct=”option2″]<\/p>\n
The correct answer is: B. F.I.F.O. basis<\/strong><\/p>\n First-in, first-out (FIFO) is a method of accounting for inventory that assumes that the first goods purchased are also the first goods sold. This means that the cost of goods sold is based on the cost of the oldest inventory items, and the ending inventory is based on the cost of the most recent inventory items.<\/p>\n During a period of rising prices, FIFO will result in a higher cost of goods sold and a lower ending inventory. This will, in turn, result in higher profits.<\/p>\n The other options are incorrect because they do not result in higher profits during a period of rising prices.<\/p>\n [amp_mcq option1=”L.I.F.O. basis” option2=”F.I.F.O. basis” option3=”Simple average price” option4=”Weighted average price” correct=”option2″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"class_list":["post-52062","post","type-post","status-publish","format-standard","hentry","category-costing","no-featured-image-padding"],"yoast_head":"\n\n