Which Statement Best Explains the LIFO Cost Flow Assumption

question 127

Multiple Choice

Which statement best explains the LIFO cost flow assumption?

• A)A method that uses the most recent costs in the calculation of cost of sales.
• B)A method that uses the cost of goods available for sale divided by the number of units available for sale.
• C)A method that assigns costs to inventories and cost of sales based on actual costs of each item.
• D)A method that uses the oldest costs in the calculation of cost of sales.

---

Definitions:

Career Average

Indicates the average achievements, earnings, or performance levels over the span of an individual's career.

Social Security

An insurance program available through the United States government that provides income to people who retire, become disabled, or who receive survivor’s benefits.

Baby Boomer Generation

The Baby Boomer generation refers to people born during the post-World War II baby boom between 1946 and 1964, known for their significant impact on the economy and culture.

Pension Plan

A retirement plan that requires an employer to contribute to a pool of funds set aside for a worker's future benefit.