The use of the FIFO cost flow assumption:
A)means that the oldest inventory is considered to be the first sold.
B)ensures that the ending inventory contains the oldest inventory costs.
C)requires that a periodic inventory system be used.
D)results in the best matching of costs to the physical flow of goods.

Question

Quizplus · Accepted Answer

The use of the FIFO cost flow assumption means that the oldest inventory is considered to be the first sold, which is why it results in the best matching of costs to the physical flow of goods.

The Use of the FIFO Cost Flow Assumption