Question

An advantage of FIFO is that it assigns the most recent costs to cost of goods sold and does a better job of matching current costs with revenues on the income statement.
A. True
B. False

Answer 1

Answer:

The correct answer is False.

Explanation:

This statement that, an advantage of FIFO is that it assigns the most recent costs to cost of goods sold and does a better job of matching current costs with revenues on the income statement, is not correct.

Under fifo method the most recent cost is assign to closing not COGS. It is LIFO method (last in first out ) in which the most recent costs is assign to cost of goods sold. Under the fifo method cost that is incurred first is charged first to COGS.