Question

Which of the following inventory costing methods uses the cost of the oldest purchases to compute the cost of goods​ sold?

Answer 1

The inventory costing method that uses the cost of the oldest purchases to compute the cost of goods sold is called the **First-In, First-Out (FIFO)** method. Under FIFO, it is assumed that the oldest inventory items are sold first, meaning the cost of the oldest purchases is used for calculating the cost of goods sold.