Using the LIFO method,the earliest purchases of inventory are assumed to be contained
A)on the balance sheet as part of ending inventory.
B)on the income statement as part of cost of goods sold.
C)equally split between the income statement and the balance sheet.
D)Impossible to determine from the given data
E)The earliest purchases of inventory under LIFO are not shown on any financial statement.

Question

Quizplus · Accepted Answer

Under the LIFO (Last In, First Out) method, the most recent purchases are assumed to be sold first, leaving the earliest purchases in ending inventory, which is reported on the balance sheet.

Using the LIFO Method,the Earliest Purchases of Inventory Are Assumed