Which of the Following Statements About the Last-In,first-Out (LIFO)assumption Is

question 24

Multiple Choice

Which of the following statements about the last-in,first-out (LIFO) assumption is true?

• A) LIFO assumes that inventory on hand consists of the oldest units.
• B) LIFO assumes that ending inventory and cost of goods sold are composed of a mixture of old and new units.
• C) LIFO results in newer costs appearing in the balance sheet.
• D) LIFO assumes the items sold are those purchased first.

---

Definitions:

Insurable Interest

The financial or other type of interest a policyholder must have in the subject matter of the insurance policy, ensuring they suffer a financial loss if the insured event occurs.

Corporation Assets

The tangible and intangible assets owned by a corporation, including real estate, equipment, intellectual property, and financial investments.

Voluntary Assumption

The act of willingly taking on duties, responsibilities, or liabilities, often without coercion or obligation.

Risk

The possibility of loss or damage arising from a specific action or event.