Which method assigns the cost of the most recent items purchased to cost of goods sold?
A)Specific identification
B)Weighted average cost
C)FIFO
D)LIFO

Question

Quizplus · Accepted Answer

LIFO (last in, first out) assigns the cost of the most recent items purchased to cost of goods sold, meaning that the most recently purchased items are considered to be sold first. This can be helpful for companies when trying to minimize taxes, as it reduces taxable income by matching high-priced items with high revenue. However, LIFO can also lead to outdated inventory values and may not accurately reflect the actual value of inventory on hand.

Which Method Assigns the Cost of the Most Recent Items