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Which inventory valuation method assumes that the most recently purchased items

Practice Questions

Q1
Which inventory valuation method assumes that the most recently purchased items are sold first?
  1. FIFO
  2. LIFO
  3. Weighted Average
  4. Specific Identification

Questions & Step-by-Step Solutions

Which inventory valuation method assumes that the most recently purchased items are sold first?
  • Step 1: Understand that inventory valuation methods are ways to calculate the value of items in stock.
  • Step 2: Learn that LIFO stands for Last In, First Out.
  • Step 3: Recognize that LIFO means the last items purchased are the first ones sold.
  • Step 4: Conclude that the inventory valuation method that assumes the most recently purchased items are sold first is LIFO.
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