FIFO inventory costing yields more accurate reporting of the inventory balance on the balance sheet than the LIFO method.

Name: FIFO inventory costing yields more accurate reporting of the inventory balance on the balance sheet than the LIFO method.
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Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) assumes that the oldest inventory items are sold first, which often aligns more closely with the actual flow of goods and current market prices, providing a more accurate reflection of inventory value on the balance sheet.

FIFO Inventory Costing Yields More Accurate Reporting of the Inventory