Inventory Costing Methods Quiz

Which inventory costing method assumes the earliest goods purchased are the first to be sold?

• Standard cost

• LIFO

• FIFO

• Average cost

In which industry is FIFO (First-In, First-Out) method suitable?

• Food and beverage

• Technology

• Automotive

• Clothing

What does LIFO (Last-In, First-Out) method assume in determining cost of goods sold?

• The earliest goods purchased are the first to be recognized

• The average cost of goods sold is used

• The latest goods purchased are the first to be recognized

• The standard cost is applied

Which inventory costing method often parallels the actual physical flow of merchandise?

• Standard cost

• LIFO

• FIFO

• Average cost

What does the average cost method assume about the goods being costed?

• They are perishable goods

• They are stored in piles

• They are of different nature

• They are similar in nature