Asked by Julie David on Jun 11, 2024
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If a company has no beginning inventory and the unit cost of inventory items does not change during the year the value assigned to the ending inventory will be the same under LIFO and average cost flow assumptions.
Average Cost Flow
An inventory costing method that assigns the average cost of goods available for sale to both ending inventory and cost of goods sold.
Ending Inventory
The value of goods available for sale at the end of an accounting period, calculated by adding purchases to the beginning inventory and subtracting goods sold.
LIFO
Last In, First Out; an inventory valuation method where the most recently produced items are recorded as sold first.
- Learn about the foundational aspects and results of various methods for inventory costing, including LIFO, FIFO, and specific identification.
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Learning Objectives
- Learn about the foundational aspects and results of various methods for inventory costing, including LIFO, FIFO, and specific identification.
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