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

Question

Quizplus · Accepted Answer

LIFO (Last in, First out) method assigns the cost of the most recent items purchased to cost of goods sold. This method assumes that the last items purchased are the first items sold, which may not always be the case in reality. However, for industries where inventory costs are rising over time, LIFO is considered a more realistic and accurate method of cost allocation. Therefore, A is the best choice.

Which Method Assigns the Cost of the Most Recent Items