During a period of steadily rising costs the inventory valua

During a period of steadily rising costs, the inventory valuation method that yields the lowest reported net income is?

Solution

During a period of steadily rising costs, the inventory valuation method that yields the lowest reported net income is LIFO - if costs are rising, then the last inventory items that were purchases would be at the highest cost. If you use the highest cost, LIFO, for valuing Inventory then your COGS expense will be at the highest possible cost thus lowering Net Income.