Which inventory valuation method considers only the latest price when closing inventory accounts?

The Last In, First Out (LIFO) inventory valuation method is designed to account for inventory in a way that emphasizes the most recently acquired items when calculating the cost of goods sold and closing inventory. Under LIFO, the last items purchased are considered the first sold. This means that when valuing ending inventory, only the prices from the most recent purchases are reflected in the inventory account.

This approach can be particularly advantageous in times of rising prices, as it reflects the higher costs of recent purchases in the cost of goods sold, thereby potentially resulting in lower taxable income. This method is commonly used in sectors where inventory costs fluctuate frequently or where the most recently acquired items are more relevant for cost analysis.

In contrast, methods like FIFO (First In, First Out) would utilize the oldest prices for valuing the remaining inventory, while weighted average cost calculates inventory value based on an average of all prices. The actual purchase price method would typically focus on the specific price paid for each individual item in inventory. Thus, LIFO uniquely accounts for only the latest prices in its valuation methods, aligning perfectly with the question's focus.