Which inventory method generally results in the most realistic ending inventory figure?
A) FIFO
B) Whichever method produces the highest ending inventory figure
C) LIFO
D) Average-cost

Question

Quizplus · Accepted Answer

FIFO (first-in, first-out) generally results in the most realistic ending inventory figure as it assumes that the first items purchased are the first ones sold, which aligns with most businesses' actual inventory practices. This method tends to provide a more accurate reflection of the current value of inventory on hand.

Which Inventory Method Generally Results in the Most Realistic Ending