The LIFO Inventory Method Assumes That the Cost of the Latest

question 189

Multiple Choice

The LIFO inventory method assumes that the cost of the latest units purchased is

• A)the last to be allocated to cost of goods sold.
• B)the first to be allocated to ending inventory.
• C)the first to be allocated to cost of goods sold.
• D)not allocated to cost of goods sold or ending inventory.

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Definitions:

Accrued Interest

Interest earned from the last payment date to the purchase date.

Interest Rate

The percentage at which interest is charged or paid on a loan or investment over a specified period.

Accrued Interest

Interest that has accumulated over a period of time but has not yet been paid.

Premium

An amount paid for an insurance policy, or the price above the normal or nominal cost in financial transactions.