If LIFO is used, ending inventory equals?

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Multiple Choice

If LIFO is used, ending inventory equals?

Explanation:
Under LIFO, the cost of the most recently purchased goods is assigned to cost of goods sold as sales are made. Because those newer items are sold first, the inventory that remains at the end consists of the oldest purchases. Therefore ending inventory reflects the cost of the oldest items still on hand. In rising-price environments this also means COGS includes higher recent costs while ending inventory shows older, lower costs.

Under LIFO, the cost of the most recently purchased goods is assigned to cost of goods sold as sales are made. Because those newer items are sold first, the inventory that remains at the end consists of the oldest purchases. Therefore ending inventory reflects the cost of the oldest items still on hand. In rising-price environments this also means COGS includes higher recent costs while ending inventory shows older, lower costs.

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