Asked by Courtney Coffman on Jun 05, 2024
Verified
By charging the oldest costs to the income statement,FIFO automatically includes in income the holding gain on the unit that was sold.
FIFO
First-In, First-Out, an inventory valuation method where goods purchased or produced first are sold, used, or disposed of first.
Income Statement
A financial statement that shows a company's revenues and expenses over a specific period, ending with the net income or loss for the period.
Holding Gain
The increase in value of an asset held over a period, not realized until the asset is sold.
- Understand the mechanism and effects of distinct inventory valuation approaches like FIFO and LIFO.
Verified Answer
Learning Objectives
- Understand the mechanism and effects of distinct inventory valuation approaches like FIFO and LIFO.
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