When a Company Uses the First-In,first-Out (FIFO)method,the Cost of Goods

question 97

True/False

When a company uses the first-in,first-out (FIFO)method,the cost of goods sold represents the cost of the most recently purchased goods and the value of ending inventory represents the cost of the oldest goods in stock.

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Definitions:

Costs Of Goods Sold

Direct costs attributable to the production of the goods sold by a company, including materials and labor.

IFRS

Stands for International Financial Reporting Standards, which are a set of accounting rules used by companies to maintain their financial statements globally, fostering transparency and comparability.

Direct Method

A cash flow statement preparation approach that separately lists major classes of gross cash receipts and payments.

Indirect Method

A method used in cash flow statements to adjust net income for changes in non-cash accounts to compute net cash from operating activities.