Under which method of inventory cost flows is the cost flow assumed to be in the reverse order in which the expenditures were made?
A) First-in, first-out
B) Last-in, last-out
C) Average cost
D) Lower of cost or market

Question

Quizplus · Accepted Answer

The Last-in, First-out (LIFO) method assumes that the most recent items added to the inventory are sold first, hence the cost flow is in the reverse order of the expenditures made.

Under Which Method of Inventory Cost Flows Is the Cost