The inventory valuation method that has the advantages of assigning an amount to inventory on the balance sheet that approximates its current cost, and also mimics the actual flow of goods for most businesses is:
A) Lower of cost or market.
B) Specific identification.
C) FIFO.
D) Weighted average.
E) LIFO.

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) assigns the oldest costs to the cost of goods sold and the most recent costs to ending inventory, which often approximates current cost and mimics the actual flow of goods for many businesses.

The Inventory Valuation Method That Has the Advantages of Assigning