Which of the Following Inventory Costing Methods Uses the Costs

question 107

Multiple Choice

Which of the following inventory costing methods uses the costs of the oldest purchases to calculate the value of the ending inventory?

• A) specific identification
• B) weighted-average
• C) last-in, first-out
• D) first-in, first-out

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Definitions:

Useful Life

The estimated time period an asset is expected to be used by a company before it is no longer useful or becomes obsolete.

Double-Entry System

An accounting system where each transaction is entered twice, as a debit in one account and a credit in another, to ensure the accounting equation is always balanced.

Financial Statements

Papers that deliver a summary of a company's financial health, featuring the income statement, balance sheet, and cash flow statement.

External Auditors

Independent third-party auditors who evaluate an organization’s financial statements to ensure accuracy and compliance with accounting standards.