LIFO vs FIFO_Quick Review 1

The FIFO method of assigning costs to inventory and cost of goods sold assumes that the inventory items are sold in the order acquired.

• True

• False

The inventory valuation method that results in the lowest taxable income is:

• FIFO

• LIFO

• Weighted Average

• Specific identification

The LIFO method assumes that cost of goods sold are made up of the most recent purchases.

• True

• False

The LIFO method assumes that the first items purchased are the ones still remaining in inventory at the end of the period.

• True

• False

The FIFO method assumes that the items still in inventory were the last ones purchased.

• True

• False