A major advantage of LIFO is that the inventory reported on the statement of financial position will approximate current cost.

Question

Quizplus · Accepted Answer

LIFO (Last In First Out) assumes that the most recently purchased items are sold first, which means that the remaining inventory consists of older, potentially less valuable items. Therefore, the inventory reported on the statement of financial position may not approximate current cost accurately.

A Major Advantage of LIFO Is That the Inventory Reported