Generally, which inventory costing method approximates most closely the current cost for each of the following?
A) Option A
B) Option B
C) Option C
D) Option D

Question

Generally, which inventory costing method approximates most closely the current cost for each of the following? 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Quizplus · Accepted Answer

The FIFO method approximates most closely the current cost for each item, as it assumes that the oldest items are sold first and therefore the cost of goods sold reflects the most recent purchase prices. This method results in a better matching of costs and revenues for the period, which is a key principle of accrual accounting.

Generally, Which Inventory Costing Method Approximates Most Closely the Current