A method of valuing inventory based on the assumption that the oldest goods will be sold first is called the:
A)LIFO method.
B)average cost method.
C)specific-unit-cost method.
D)FIFO method.

Question

Quizplus · Accepted Answer

The FIFO method assumes that the oldest goods are sold first and values inventory accordingly. This method can be useful when prices are rising, as it results in a higher cost of goods sold and lower taxable income compared to LIFO.

A Method of Valuing Inventory Based on the Assumption That