When a Company Uses FIFO, the Cost of Sales Correlates

question 50

True/False

When a company uses FIFO, the Cost of sales correlates to the most recently purchased goods, and the ending inventory correlates to the oldest goods in stock.

---

Definitions:

Budget Deficit

The condition when a government spends more than its income, requiring it to borrow money or accumulate debt to cover the gap.

Trade Deficit

A situation where a country's imports of goods and services exceed its exports, leading to negative balance of trade.

Real Exchange Rate

A measure that adjusts the nominal exchange rate by the relative prices of domestic and foreign goods and services, reflecting the purchasing power of two currencies.

Net Exports

The value of a country's total exports minus its total imports, indicating whether a country is a net exporter or importer.