Question

Using the LIFO method of inventory valuation will always produce the same results for cost of goods sold and ending inventory whether a company uses perpetual or periodic inventory costing methods.

Answer 1

Options: True or False

Answer:True

Explanation:LIFO(LAST IN FIRST OUT) is an inventory management system that is adopted in warehousing, Distribution, logistics and supply chain management etc where the most recent inventory or the recently received stock is given out before giving out the earlier received inventories or stocks.

Inventory valuation using LIFO method will ensure that the most recently received inventories are considered to be the ones to be sold out and accounted before others.