Which inventory costing method most closely approximates current cost for each of the following: Ending Inventory Cost of Goods Sold
A) FIFO LIFO
B) LIFO FIFO
C) LIFO LIFO
D) FIFO FIFO

Question

Quizplus · Accepted Answer

FIFO closely approximates current cost for ending inventory because the items most recently purchased (and likely at current prices) are assumed to be sold last, leaving the newer items in ending inventory. This results in a better representation of current market prices for the items in inventory.

Which Inventory Costing Method Most Closely Approximates Current Cost for Each