Which of the Following Does NOT Correctly Describe the FIFO

question 31

Multiple Choice

Which of the following does NOT correctly describe the FIFO cost formula?

• A) This method assumes that the oldest inventory costs are the first costs recorded for cost of goods sold.
• B) This method assumes that most current inventory costs are the first costs recorded for cost of goods sold.
• C) This method approximates the physical flow of most types of goods.
• D) This method is permitted under both ASPE and IFRS.

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Definitions:

Returns

The profits or benefits gained from an investment or venture.

Project Management

The process of leading the work of a team to achieve goals and meet success criteria at a specific time.

Inception

The beginning or start of something, particularly an idea or project.

Slack

Excess capacity or time available in a system, often seen as a buffer to accommodate unforeseen circumstances.