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    Question

    Under which inventory method, would the inventory on

    the balance sheet best approximate the current cost?
    A First- in- First Out (FIFO) Correct Answer Incorrect Answer
    B Last –in- First-Out (LIFO) Correct Answer Incorrect Answer
    C Weighted Average cost Correct Answer Incorrect Answer
    D Average cost Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Under the FIFO method, ending inventory is made up of the most recent purchase, thereby providing a closer approximation of the current value.

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