The assignment of costs to the cost of goods sold and to inventory under the FIFO is the same for both the perpetual and periodic inventory systems.

Question

Quizplus · Accepted Answer

The assignment of costs under the FIFO method is based on the assumption that the first items purchased (or produced) are the first ones sold. This means that when determining the cost of goods sold and the value of ending inventory, the oldest costs are used first. This principle remains the same regardless of whether a company uses the perpetual or periodic inventory system.

The Assignment of Costs to the Cost of Goods Sold