FIFO inventory method assumes:

A Last items purchased are sold first

B First items purchased are sold first

C Average cost is used

D Specific items are identified

✓ Correct Answer: Option B

First-In, First-Out (FIFO) assumes the oldest inventory items are sold first.

💡 Why is B) the correct answer?

The correct answer to the question "FIFO inventory method assumes:" is Option B: First items purchased are sold first.

The other options — A) Last items purchased are sold first, C) Average cost is used, D) Specific items are identified — are incorrect for this CPA Exam Prep question. As explained above: First-In, First-Out (FIFO) assumes the oldest inventory items are sold first.

📚 About This CPA Exam Prep Practice Question

This 1-level CPA Exam Prep question from the Financial Accounting (FAR) topic is part of BrainForge Quiz's free exam preparation library. Each question includes the correct answer and a detailed explanation to help you understand the underlying concept, not just memorize the answer.

How to use this page: Read the question above, consider all four options (A through D), then check the highlighted correct answer and explanation. For active timed practice, start a free CPA Exam Prep practice test or use flashcards for spaced repetition review.

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FIFO inventory method assumes:

✓ Correct Answer: Option B

📚 About This CPA Exam Prep Practice Question

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