Which of the Following Statements Regarding Inventories Is Correct

question 56

Multiple Choice

Which of the following statements regarding inventories is correct?

• A) FIFO 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.

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Definitions:

Information Processing

A theory or approach in psychology that describes how human beings receive, store, retrieve, and use information, likening the mind to a computer.

Memory Control Strategy

Techniques and methods used to enhance the ability to remember information, manage memories, or improve memory performance.

Operating Efficiency Hypothesis

The theory that business operations and processes can be optimized for performance and cost-efficiency, leading to improved profitability and competitiveness.

Retrieval Cues

Stimuli that aid the recall of information stored in the memory by making it easier to access.