An asset management and valuation method that assumes assets produced or acquired last are the ones used, sold or disposed of first

• A. FIFO (first in first out)
• B. Weighted Average
• C. Specific Identification
• D. LIFO (last in first out)

Answer: (D)

This describes the cost-flow assumption where the most recently produced or acquired items are the ones used or sold first. That is exactly what last in, first out means: the latest costs are charged to the cost of goods sold when you dispose of inventory, while the oldest costs stay in ending inventory. This differs from FIFO, which uses the oldest items first; Weighted Average blends costs across all units; and Specific Identification tracks each item individually. In inflationary settings, this LIFO approach often results in higher COGS and lower ending inventory, which can affect reported profits and taxes.