When a company uses the last-in,first-out (LIFO)method,the cost of goods sold represents the costs of most recently purchased goods,and the ending inventory represents the oldest costs.

Question

Quizplus · Accepted Answer

This is the basic principle of the LIFO method. The most recently purchased (and usually more expensive) goods are assumed to be sold first, while the older (and cheaper) goods remain in inventory, leading to a higher cost of goods sold and lower ending inventory.

When a Company Uses the Last-In,first-Out (LIFO)method,the Cost of Goods