Identify the characteristic(s) of the last in, first out (LIFO) inventory method. (Check all that apply.) Multiple select question. For most businesses, the physical flow of inventory is on a last in, first out basis. LIFO computes the cost of ending inventory using the cost of the oldest merchandise on hand during the period. LIFO assumes that the most recently purchased merchandise is sold first. LIFO assigns the most recent costs to cost of goods sold