ENTREPRENEURIAL OPERATIONS
INVENTORY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which inventory management method assumes assets (inventory) produced or acquired last are the ones used, sold or disposed of first?
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FIFO Method
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Just In Case (JIC)
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Periodic inventory
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LIFO Method
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Explanation:
Detailed explanation-1: -The LIFO method assumes that the last assets purchased by a company will be the first it sells, while older inventory is left over at the end of the accounting period. This is commonly used for companies that carry inventory that becomes obsolete very rapidly.
Detailed explanation-2: -Last in, first out (LIFO) is a method used to account for how inventory has been sold that records the most recently produced items as sold first.
Detailed explanation-3: -The FIFO method assumes that the oldest products in a company’s inventory have been sold first.
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