The inventory method that assumes a company sells the first items it bought before it sells ones it bought later is called:
A) Last in, first out
B) First in, first out
C) Specific identification
D) Weighted average

Question

Quizplus · Accepted Answer

First in, first out (FIFO) assumes that the first units of inventory purchased are the first ones sold. This method is widely used in businesses as it reflects the actual flow of goods and can result in a more accurate representation of a company's profitability.

The Inventory Method That Assumes a Company Sells the First