which of the following inventory methods best matches the cost of ending inventory to the current...
which of the following inventory methods best matches the cost of ending inventory to the current selling prices for that same inventory?
1. FIFO
2. LIFO
3. Weighted average cost
4. retail inventory method
Explain the answer in detail.
Homework Answers
Solution:
FIFO inventory method best matches the cost of ending inventory to the current selling prices for that same inventory because in this method inventory first purchase considered as sold first. Therefore inventory purchased in last considered as ending inventory. As ending inventory consist of inventory recently purchased, therefore it represents current selling price for that inventory.
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Calculate the cost of ending inventory and the cost of goods sold
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(Do not round your intermediate calculations. Round "Weighted
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