The LIFO inventory method assumes that the cost of the latest units purchased are
A) the last to be allocated to cost of goods sold.
B) the first to be allocated to ending inventory.
C) the first to be allocated to cost of goods sold.
D) not allocated to cost of goods sold or ending inventory.

Question

Quizplus · Accepted Answer

LIFO stands for Last In, First Out, which means that the cost of the latest units purchased are the first to be allocated to cost of goods sold. This results in the oldest inventory being left in ending inventory.

The LIFO Inventory Method Assumes That the Cost of the Latest