How would you explain the differences between FIFO, LIFO, and average cost to a new accounting intern?

• A. FIFO sells newest inventory first, LIFO sells oldest, and average cost uses the median cost.
• B. FIFO and LIFO are the same, average cost uses the lowest cost.
• C. FIFO and LIFO both sell inventory randomly, average cost uses the highest cost.
• D. FIFO sells oldest inventory first, LIFO sells newest, and average cost averages all costs.

Answer: (D)