Which statement best explains the LIFO cost flow assumption?
A)A method that uses the most recent costs in the calculation of cost of sales.
B)A method that uses the cost of goods available for sale divided by the number of units available for sale.
C)A method that assigns costs to inventories and cost of sales based on actual costs of each item.
D)A method that uses the oldest costs in the calculation of cost of sales.

Question

Quizplus · Accepted Answer

The LIFO (Last In, First Out) cost flow assumption is a method that uses the most recent costs in the calculation of cost of sales, assuming that the last items added to inventory are the first ones sold.

Which Statement Best Explains the LIFO Cost Flow Assumption