Question

Which inventory cost flow method most realistically matches the current cost of inventory with the current revenue it produces?

A- Specific identification
B- Weighted-average
C- LIFO
D- FIFO

Answer 1

The FIFO inventory cost flow method most realistically matches the current cost of inventory with the current revenue it produces.

Step-by-step explanation:

The FIFO (First-In, First-Out) inventory cost flow method most realistically matches the current cost of inventory with the current revenue it produces. This method assumes that the first items purchased are the first ones sold, so the cost of goods sold is based on the oldest inventory and the ending inventory is based on the most recent purchases. This provides a more accurate representation of the current value of inventory and the revenue generated from it.