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Match the Following Cost Flow Assumption to Their Inventory Costing

Question 168

Matching

Match the following cost flow assumption to their inventory costing method:

Premises:

Responses:

Cost flow matches the unit sold to the unit purchased.

Average Cost

Cost flow is in the reverse order in which the cost were incurred.

Last-in, Last-out (LIFO)

Cost flow is an average of the costs.

Specific Identification

Cost flow is in the order in which the costs were incurred.

First-in, First-out (FIFO)

Premises:

Cost flow matches the unit sold to the unit purchased.

Cost flow is in the reverse order in which the cost were incurred.

Cost flow is an average of the costs.

Cost flow is in the order in which the costs were incurred.

Responses:

Average Cost

Last-in, Last-out (LIFO)

Specific Identification

First-in, First-out (FIFO)

Correct Answer:

Premises:

Responses:

Cost flow matches the unit sold to the unit purchased.

Cost flow is in the reverse order in which the cost were incurred.

Cost flow is an average of the costs.

Cost flow is in the order in which the costs were incurred.

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