Which of the four inventory approaches transfers the most recent purchase cost to the cost of goods sold and the remaining items in inventory are valued at the oldest acquisition costs?
A)LIFO.
B)FIFO.
C)Average.
D)Specific identification.

Question

Quizplus · Accepted Answer

LIFO (Last In, First Out) assumes that the most recently purchased items are sold first and the remaining items in inventory are valued at the oldest acquisition costs. This results in a higher cost of goods sold and a lower net income in periods of inflation. Therefore, LIFO is the best choice for transferring the most recent purchase cost to the cost of goods sold.

Which of the Four Inventory Approaches Transfers the Most Recent