LIFO means last in, first out. When merchandise is sold from inventory, it is the last one added to the inventory.
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http://financial-education.com/2007/03/05/inventory-accounting-methods-lifo-fifo-weighted-average-and-specific-identification/
Can somebody please explain what this is asking? I do not understand any of this.
A firm utilizing LIFO inventory accounting would, in calculating gross profits, assume that :
A. all sales were from beginning inventory.
B. sales were from current production until current production was depleted, and then use sales from beginning inventory.
C. all sales were from current production.
D. all sales were for cash.
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