Asked by ashanti morris on May 28, 2024
Verified
The FIFO method separates work done on beginning inventory in the previous period from work done on it in the current period.
FIFO Method
An inventory valuation method that assumes the first items purchased are the first ones sold, standing for "First-In, First-Out."
Beginning Inventory
The value of inventory that a company has at the beginning of an accounting period, before any purchases or production.
- Differentiate between several costing methods (FIFO, weighted average) and their consequences on the reporting of costs.
Verified Answer
ZK
Zybrea KnightJun 03, 2024
Final Answer :
True
Explanation :
This statement is true. The FIFO method assumes that the first items purchased or produced are the first items sold or used, meaning that work done on beginning inventory in a previous period is separated from work done on it in the current period.
Learning Objectives
- Differentiate between several costing methods (FIFO, weighted average) and their consequences on the reporting of costs.
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