Under the LIFO method, the flow of costs through the accounting records will:
A)be nearly the opposite of the physical flow of goods through the business.
B)closely match the physical flow of goods through the business.
C)exactly match the physical flow of goods through the business.
D)have no relationship to the physical flow of goods through the business.

Question

Quizplus · Accepted Answer

LIFO (Last In, First Out) assumes that the last units purchased are the first units sold, hence the cost of the most recent inventory is matched against revenue. This means that the flow of costs through the accounting records will be nearly the opposite of the physical flow of goods through the business.

Under the LIFO Method, the Flow of Costs Through the Accounting