When merchandise sold is assumed to be in the order in which the purchases were made, the company is using
A) first-in, last-out
B) last-in, first-out
C) first-in, first-out
D) average cost

Question

Quizplus · Accepted Answer

First-in, first-out assumes that the first items purchased are the first ones sold, which is the most logical way for many businesses to track their inventory. The other options, last-in, first-out and average cost, may be used by some businesses, but they are not assumed to be the order in which items were purchased.

When Merchandise Sold Is Assumed to Be in the Order