Under which method of inventory costing is the ending inventory assumed to be composed of the most recent costs?
A) Average cost
B) Last-in, first-out
C) First-in, last-out
D) First-in, first-out

Question

Quizplus · Accepted Answer

The First-in, First-out (FIFO) method of inventory costing assumes that the oldest items purchased or manufactured are sold first, leaving the most recently acquired items in ending inventory. This means the ending inventory is composed of the most recent costs.

Under Which Method of Inventory Costing Is the Ending Inventory