The first-in, first-out (FIFO) method of costing inventory most closely approximates the current cost of inventory as listed on the balance sheet. This is because the FIFO inventory cost flow method inventory includes all of the units purchased most recently and, therefore, those whose cost will be most closely aligned with the costs expressed on the balance sheet. Conversely, there is no guarantee that the specific identification would include the most recent items, and the weighted-average method would take into account both current and older costs. The last-in, first-out method would represent the oldest inventory costs.