Question

Each inventory costing method matches the flow of inventory costs in a business and is used...

Each inventory costing method matches the flow of inventory costs in a business and is used to determine ending inventory and cost of goods sold.

True

False

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Answer #1
  • The statement is TRUE.
  • Each Inventory costing method MATCHES the flow of inventory costs in a business and is used to determine ending inventory and cost of goods sold:

FIFO based on the flow of inventory cost from earliest purchases to latest purchases.

LIFO based on the flow of inventory cost from latest purchases to earliest purchases.

Weighted Average cost and Specific Identification also based on flow of inventory cost and are used to determine cost of goods sold and ending inventory.

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