MANAGEMENT

Detailed explanation-1: -Answer and Explanation: In a period of declining costs, b) LIFO will result in the highest ending inventory. The inventory acquired earlier, making up a greater amount of ending inventory in LIFO than under FIFO. The declining purchase costs are used to calculate the cost of goods sold under LIFO.

Detailed explanation-2: -LIFO is not a good indicator of ending inventory value because it may understate the value of inventory. LIFO results in lower net income (and taxes) because COGS is higher. However, there are fewer inventory write-downs under LIFO during inflation.

Detailed explanation-3: -The LIFO method considers the most recent items purchased first in terms of the cost of goods sold and allocates older items bought in the ending inventory. You should note that using the LIFO method during inflationary times can result in lower net income values and a decreased ending inventory value.

Detailed explanation-4: -Two of these options are LIFO and FIFO. Companies that opt for the LIFO method sell the most recent inventory times which usually cost more to obtain or manufacture, while the FIFO method results in a lower cost of goods sold and higher inventory.

Detailed explanation-5: -Answer and Explanation: The average-cost method generally results in the most realistic ending inventory figure.