Identify which inventory costing method LIFO or FIFO achieves the effect listed in the following items:
-Which one of the following best explains the distinction between inventory and an operating asset?
a. ownership
b. intent
c. cost
d. purchase price

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) is an inventory costing method that assumes the oldest inventory items are sold first. It is often used to explain the distinction between inventory and an operating asset because it reflects the intent to sell the inventory in the normal course of business, distinguishing it from assets intended for use in operations.

Identify Which Inventory Costing Method LIFO or FIFO Achieves the Effect