The _____ method of inventory valuation provides the most realistic amount for the Cost of Goods Sold section of the income statement.
A) break-even cost
B) total cost
C) first-in, first-out (FIFO)
D) last-in, first-out (LIFO)

Question

The _____ method of inventory valuation provides the most realistic amount for the Cost of Goods Sold section of the income statement.​
A) break-even cost
B) total cost
C) ​first-in, first-out (FIFO)
D) ​last-in, first-out (LIFO)

Quizplus · Accepted Answer

The LIFO method assumes that the most recently purchased items are sold first, which often aligns more closely with current market prices, providing a more realistic cost of goods sold during periods of inflation.

The _____ Method of Inventory Valuation Provides the Most Realistic