If a business operates in an industry that experiences significant cost changes,it would be to its benefit to use the first-in,first-out (FIFO)method.

Question

Quizplus · Accepted Answer

FIFO assumes that the first items purchased are the first sold. In a period of rising costs, using FIFO will result in lower cost of goods sold and a higher ending inventory, which can lead to a better overall financial position for the business. This is because the older, lower cost items are being sold first, leaving newer, higher cost items in inventory.

If a Business Operates in an Industry That Experiences Significant