The inventory costing method that assigns the most recent costs to cost of good sold is:
A) FIFO.
B) LIFO.
C) average cost.
D) specific identification.

Question

Quizplus · Accepted Answer

LIFO (last-in, first-out) method assumes that the most recently purchased items are sold first, therefore assigning the most recent costs to cost of goods sold. This method is particularly useful when prices are rising, as it results in a lower reported ending inventory and higher cost of goods sold, which can help to offset the impact of inflation on profits.

The Inventory Costing Method That Assigns the Most Recent Costs