Asked by Jessica Pierre on Jul 20, 2024
Verified
Cost flow is in the reverse order in which costs were incurred when using
A) weighted average
B) last-in, first-out
C) first-in, first-out
D) average cost
Reverse Order
A method of arranging or presenting items so that the last becomes first and the first last.
Last-In, First-Out
An inventory valuation method where the costs of the most recently produced or purchased items are the first to be expensed.
- Understand the effect of cost movements on inventory valuation.
Verified Answer
PD
Paulette DuraznoJul 21, 2024
Final Answer :
B
Explanation :
The Last-In, First-Out (LIFO) method assumes that the most recent costs incurred are the first to be allocated to cost of goods sold, meaning the cost flow is in the reverse order of the costs incurred.
Learning Objectives
- Understand the effect of cost movements on inventory valuation.