Last In, First OutTwo-part consideration:Why do you think a company would ever choose to use perpetual LIFO as its costing method? It is clearly more trouble to calculate than other methods and doesn’t really align with the natural flow of the merchandise, in most cases.Should the order in which the items are actually sold determine which costs are used to offset sales revenues from those goods? Explain your understanding of these issues.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Last In, First Out

Two-part consideration:

Why do you think a company would ever choose to use perpetual LIFO as its costing method? It is clearly more trouble to calculate than other methods and doesn’t really align with the natural flow of the merchandise, in most cases.
Should the order in which the items are actually sold determine which costs are used to offset sales revenues from those goods? Explain your understanding of these issues.

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