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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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