When merchandise sold is assumed to be in the order in which the expenditures were made, the inventory costing method is called:
A) first-in, last-out.
B) last-in, first-out.
C) first-in, first-out.
D) average cost.

Question

Quizplus · Accepted Answer

The description given refers to the first-in, first-out (FIFO) inventory costing method, where the oldest inventory items are assumed to be sold first. Option A refers to first-in, last-out (FILO) and option B to last-in, first-out (LIFO). Option D refers to averaging the cost of all inventory items.

When Merchandise Sold Is Assumed to Be in the Order