During a period of falling prices, which of the following inventory methods generally results in the lowest balance sheet amount for inventory?

A) average cost method
B) LIFO method
C) FIFO method
D) cannot tell without more information

Falling Prices

A situation where the general level of prices for goods and services decreases over time.

LIFO Method

An inventory valuation method that assumes the last items added to inventory are the first ones to be sold (Last In, First Out).