The FIFO inventory method assumes that costs for the earliest units purchased are the first to be charged to the cost of goods sold.

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The statement is true. Under the FIFO (first-in, first-out) method of inventory valuation, the cost of goods sold is based on the assumption that the first units of inventory purchased are the first ones sold, and thus their cost is charged to the cost of goods sold, followed by the cost of the next batch of units purchased, and so on. This results in calculating the cost of ending inventory based on the most recent and usually higher unit costs.

The FIFO Inventory Method Assumes That Costs for the Earliest