Which of the following statements regarding inventory accounting is true?

Multiple Choice

• FIFO charges the most recent costs against revenues on the income statement.

• The specific identification method of inventory accounting is generally considered to be the most prevalent.

• The primary difference between FIFO and LIFO is that each method makes a different choice regarding which financial statement element is shown at the out-of-date cost.

• In the U.S., FASB prefers replacement cost accounting because it records holding gains on the financial statements as they arise.