The assignment of costs to the cost of goods sold and to inventory under FIFO is the same for both the perpetual and periodic inventory systems.

Question

Quizplus · Accepted Answer

The assignment of costs to the cost of goods sold and to inventory under the FIFO (First-In, First-Out) method is the same for both the perpetual and periodic inventory systems. In both methods, the oldest cost of inventory is assumed to be sold first, while the most recent cost is assumed to remain in the inventory. Therefore, the cost assigned to the cost of goods sold will be based on the oldest cost of inventory available, while the cost assigned to the ending inventory will be based on the most recent cost of inventory.

The Assignment of Costs to the Cost of Goods Sold