Which of the following statements regarding inventories is correct?

A) FIFO assumes that the costs of the earliest goods acquired are the last to be sold.
B) It is generally good business management to sell the most recently acquired goods first.
C) Under FIFO, the ending inventory is based on the latest units purchased.
D) FIFO seldom coincides with the actual physical flow of inventory.

FIFO

Stands for "First-In, First-Out," an inventory valuation method where goods sold are those that are oldest in the inventory first.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding new purchases to the starting inventory and subtracting goods sold.

Physical Flow

The actual movement of goods from the point of production through to the end-user, encompassing distribution and logistics.