Asked by Sheryl Kambuni on Jun 18, 2024
Verified
Ending inventory is made up of the oldest purchases when a company uses
A) first-in, first-out
B) last-in, first-out
C) average cost
D) retail method
Ending Inventory
Ending inventory is the total value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases minus cost of goods sold.
Oldest Purchases
This refers to the oldest inventory items purchased first, often related to the first-in, first-out (FIFO) inventory management method.
- Acquire knowledge on the advantages and impacts of utilizing distinct inventory costing techniques (LIFO, FIFO) under various costing conditions.
Verified Answer
MS
manpreet singhJun 21, 2024
Final Answer :
B
Explanation :
Under the last-in, first-out (LIFO) method, the most recent purchases are the first to be used or sold, leaving the oldest items in inventory. This means that the ending inventory is composed of the oldest purchases.
Learning Objectives
- Acquire knowledge on the advantages and impacts of utilizing distinct inventory costing techniques (LIFO, FIFO) under various costing conditions.
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