Answer the following statements true (T) or false (F)
1) When a company uses the first-in, first-out (FIFO) method, the cost of goods sold represents the cost of the most recently purchased goods and the value of ending inventory represents the cost of the oldest goods in stock.
2) The total cost spent on inventory that was available to be sold during a period is called the cost of goods sold.
3) First Street Merchandisers has total cost of goods sold of $54,500, total beginning inventory of $18,500, and total ending inventory of $22,100. Cost of goods available for sale is $73,000
4) Under the last-in, first-out (LIFO) method, the cost of goods sold is based on the oldest purchases.
5) The last-in, first-out (LIFO) costing system may or may not match the physical flow of goods.
1. FALSE
2. FALSE
3. FALSE
4. FALSE
5. TRUE
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