The FIFO method of inventory valuation focuses on the balance sheet as the most current costs are in ending inventory.

Question

Quizplus · Accepted Answer

The FIFO (first-in, first-out) method assumes that the oldest costs are the first to be sold or transferred out of inventory, and the most recent costs are in ending inventory. Therefore, the balance sheet reflects the most current costs, making statement A true.

The FIFO Method of Inventory Valuation Focuses on the Balance