Asked by Joshua Waterman on Jun 17, 2024
Verified
FIFO is the inventory costing method that follows the physical flow of the goods.
FIFO
First-In, First-Out, an accounting method for managing inventory and financial matters where the oldest inventory items are sold or used first.
Inventory Costing
A method used to assign costs to inventory items and determine the cost of goods sold during a period.
- Comprehend the differences and applications of FIFO, LIFO, and average inventory costing methods.
Verified Answer
DB
David BrownJun 23, 2024
Final Answer :
True
Explanation :
FIFO stands for First In, First Out, which means that the first units received are the first ones to be sold or used, and the cost of those units is assigned to the cost of goods sold. This follows the physical flow of the goods and is a common method used in accounting for the cost of inventory.
Learning Objectives
- Comprehend the differences and applications of FIFO, LIFO, and average inventory costing methods.
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