When a company uses FIFO, the Cost of sales correlates to the most recently purchased goods, and the ending inventory correlates to the oldest goods in stock.

Name: When a company uses FIFO, the Cost of sales correlates to the most recently purchased goods, and the ending inventory correlates to the oldest goods in stock.
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Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) means the cost of sales is based on the oldest inventory costs, while the ending inventory reflects the most recent purchase costs.

When a Company Uses FIFO, the Cost of Sales Correlates