The LIFO Inventory Cost Flow Assumes That the Cost of the Newest

question 62

Multiple Choice

The LIFO inventory cost flow assumes that the cost of the newest goods purchased are:

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

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Definitions:

Operating Costs

Expenses associated with the day-to-day operation of a business, excluding financing costs and taxes.

Useful Life

The estimated period over which an asset is expected to be usable for its intended purpose, affecting its depreciation.

Machine

Equipment or apparatus designed to perform a specific task in the manufacturing process.

Present Value

The immediate worth of anticipated money or streams of cash flows, computed with an agreed-upon rate of return.