- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 2. Analyzing Income Statements
- Subject 2. Expense Recognition - Inventory
CFA Practice Question
What does the FIFO inventory method assume about the first units purchased?
B. They are the units that remain in ending inventory.
C. They are the only units used in computing average cost.
A. They are the first units sold.
B. They are the units that remain in ending inventory.
C. They are the only units used in computing average cost.
Correct Answer: A
FIFO treats the first units purchased as though they are the first units sold.
User Contributed Comments 2
| User | Comment |
|---|---|
| jasonkwk1 | FIFO =first in first out |
| gomonzur | Got it right |