Accounting for IGCSE & O level - Final Statements (Section 6 - No. 42)

If a company is experiencing rising costs, which inventory valuation method is most likely to result in the lowest net income (profit)?

FIFO

LIFO

AVCO

Weighted Average

LIFO will result in the lowest net income because the most recent and highest prices are assigned to the cost of goods sold, reducing net income.