Asked by
Kianna Smith
on Nov 18, 2024Verified
Cost flow is assumed to be in the reverse order of costs incurred.
A)Weighted average
B)First-in, first-out (FIFO)c.Last-in, first-out (LIFO)d.Specific identification
Cost Flow Assumptions
Accounting methods that determine how costs are assigned to inventory and cost of goods sold, such as FIFO, LIFO, and average cost.
FIFO
An inventory valuation method where the first items produced or purchased are the first sold, leading to inventory being valued at approximate recent costs.
LIFO
An inventory valuation method that assumes the last items added to the inventory are the first ones to be sold ("Last In, First Out").
- Understand the multiplicity of cost flow assumptions and their application in the assessment of inventory value.
Verified Answer
AB
Learning Objectives
- Understand the multiplicity of cost flow assumptions and their application in the assessment of inventory value.