Las Vegas Plc sells second hand luxury cars of various makes and models,and uses the FIFO cost flow assumption to ascertain the cost of ending inventory.This would be incorrect because:

Question

Quizplus · Accepted Answer

Using the FIFO cost flow assumption may not capture the unique characteristics of items held in inventory, which is especially true for second-hand luxury cars where each vehicle may have specific features, mileage, and condition. This can lead to incorrect valuation of the ending inventory and potentially overstatement of profits. Other factors such as bookkeeping requirements or industry practices may not necessarily make the use of FIFO incorrect.

Las Vegas Plc Sells Second Hand Luxury Cars of Various