Under which method of inventory costing is the cost flow assumed to be in the reverse order in which the expenditures were made?
A) Average cost
B) Last-in, first-out
C) First-in, first-out
D) Specific identification method

Question

Quizplus · Accepted Answer

The method of inventory costing in which the cost flow is assumed to be in the reverse order in which the expenditures were made is the Last-in, First-out (LIFO) method. With this method, the most recent inventory purchases are assumed to be the first ones sold, resulting in the older, lower-cost items being left in ending inventory.

Under Which Method of Inventory Costing Is the Cost Flow