When purchases and sales occur continuously,the most recently incurred costs will be virtually identical to current replacement cost so LIFO provides a good match between current costs and current revenues.

Question

Quizplus · Accepted Answer

LIFO (Last-In, First-Out) assumes the most recent costs are the first to be used in cost of goods sold, aligning closely with current replacement costs and providing a better match with current revenues.

When Purchases and Sales Occur Continuously,the Most Recently Incurred Costs