When the LIFO Costing Method Is in Use,the Seller

question 40

Multiple Choice

When the LIFO costing method is in use,the seller:

• A)Must sell the most recently acquired units first.
• B)Must sell the oldest unit in inventory first.
• C)Assumes that the most recently acquired units are sold first.
• D)Assumes that the oldest units in inventory are sold first.

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Definitions:

Accounting Costs

Costs recognized in the financial statements, consisting of both explicit costs like wages and materials, and allocated costs such as depreciation.

Allocated

Refers to the distribution or assignment of resources, costs, or expenses to various departments, projects, or activities.

Over Budget

A situation in which actual spending exceeds the planned or allocated budget.

Investment Turnover

A ratio that measures the efficiency of a company in generating sales or revenue from its investment in assets.