A Disadvantage of the FIFO Method Is That

question 91

Multiple Choice

A disadvantage of the FIFO method is that:

• A) recent sales are not matched with recent costs.
• B) the cost flow tends to follow the physical flow.
• C) the figure for ending inventory is made up of current costs on the income statement.
• D) None of the above is correct.

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Definitions:

Stele of Hammurabi

An ancient Babylonian monument bearing the law code of King Hammurabi, one of the earliest and most complete written legal codes.

Divinity

A quality of being divine or godlike, often associated with gods, deities, or the sacred.

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The elaborate entrance gate to the ancient city of Babylon, constructed in about 575 BCE by order of King Nebuchadnezzar II, dedicated to the goddess Ishtar and known for its blue glazed tiles and depictions of dragons and bulls.

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