The LIFO inventory costing method assumes that the costs of the units most recently purchased are:

Question

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LIFO stands for last in, first out. This means that the costs of the units most recently purchased are the first to be assigned to cost of goods sold. This is because the assumption is that the older inventory, which was purchased at a lower cost, remains in inventory until the more recently purchased inventory is sold. Therefore, the cost of goods sold is assigned the most recent, and likely higher, cost of inventory.

The LIFO Inventory Costing Method Assumes That the Costs of the Units