Which of the Following Statements Is Correct with Respect to Inventories

question 86

Multiple Choice

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

• A) The FIFO method 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:

Shopkeeper

An individual who owns or manages a small retail business.

High Price

The condition of a good or service being sold at a relatively elevated value compared to its perceived worth or compared to others in the market.

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Shopkeeper

An individual who owns, operates, or manages a retail store, selling goods to the public.