Questions: The inventory cost flow method that reports the most current prices in ending inventory is a. FIFO b. specific identification c. weighted average cost d. Lifo

The answer is the first one (A): FIFO (First-In, First-Out).

Explanation for each option:

a. FIFO (First-In, First-Out): This method assumes that the oldest inventory items are sold first, so the ending inventory consists of the most recently purchased items. Therefore, it reports the most current prices in ending inventory.

b. Specific Identification: This method tracks the actual cost of each specific item in inventory. While it can reflect current prices if the specific items are recent purchases, it does not inherently report the most current prices unless the specific items remaining are the most recent.

c. Weighted Average Cost: This method averages the cost of all inventory items available for sale during the period and assigns this average cost to both the cost of goods sold and ending inventory. It does not specifically reflect the most current prices in ending inventory.

d. LIFO (Last-In, First-Out): This method assumes that the most recently purchased items are sold first, so the ending inventory consists of the oldest items. Therefore, it does not report the most current prices in ending inventory.

In summary, FIFO is the inventory cost flow method that reports the most current prices in ending inventory.