FIFO Is the Inventory Costing Method That Follows the Physical

question 181

True/False

FIFO is the inventory costing method that follows the physical flow of the goods.

---

Definitions:

Allowance Method

An accounting technique that estimates and reduces accounts receivable to reflect only amounts expected to be collected.

Allowance Method

A technique in accounting used to account for bad debts, where anticipated uncollectible accounts receivable are estimated and recorded.

Adjusting Entry

Journal entries made in accounting to update records for expenses and revenues not recorded during an accounting period.

Bad Debt Expense

The estimated amount of accounts receivable that a company does not expect to collect, recognized as an expense on the income statement.