Which method assigns the cost of the most recent items purchased to ending inventory?

Question

Quizplus · Accepted Answer

FIFO assigns the cost of the oldest items to ending inventory, while LIFO assigns the cost of the most recent items to cost of goods sold. Specific identification is used when each item in inventory can be identified with a specific cost. Weighted average cost calculates a weighted average of all item costs in inventory, and assigns that average cost to units sold and ending inventory. Therefore, based on the question, the best choice would be FIFO, as it assigns the cost of the most recent items to cost of goods sold and the cost of the oldest items to ending inventory.

Which Method Assigns the Cost of the Most Recent Items