Which of the Following Statements Is Correct with Respect to Inventories

question 55

Multiple Choice

Which of the following statements is correct with respect to inventories?

• A) The FIFO cost formula assumes that the costs of the earliest goods acquired are the last to be sold.
• B) It is generally good business management to sell the most recently acquired goods first.
• C) Under FIFO, the ending inventory is based on the latest units purchased.
• D) FIFO seldom coincides with the actual physical flow of inventory.