An inventory of grocery items where the shelves are stocked from the back would be similar to which cost formula?
A)FIFO
B)specific identification
C)weighted-average
D)none of the above

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) assumes that the first items purchased are the first ones sold, meaning that the cost of goods sold will be based on the oldest inventory. In an inventory where shelves are stocked from the back, the assumption is that the items at the front of the shelf are the newest and those at the back are the oldest, which aligns with the FIFO cost formula.

An Inventory of Grocery Items Where the Shelves Are Stocked