accountingweek3d1 - Running head ACCOUNTING WEEK 3 D1 accounting week 3 d1 spencer beymer Ashford University 1 ACCOUNTING WEEK 3 D1 2 accounting week 3

accountingweek3d1 - Running head ACCOUNTING WEEK 3 D1...

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Running head: ACCOUNTING WEEK 3 D1 1 accounting week 3 d1 spencer beymer Ashford University July 23, 2015
ACCOUNTING WEEK 3 D1 2 accounting week 3 d1 Chapter five of our textbook discusses two cost flow assumptions, which are the FIFO and LIFO method. FIFO and LIFO are used to value the cost of goods sold and the remaining inventory. FIFO stands for "first in, first out," this means that the goods first added to inventory are assumed to be the first goods removed from inventory for sale. LIFO stands for "last in, first out," which means that the goods last added to inventory are assumed to be the first goods removed from inventory for sale. Below is a table comparing both LIFO and FIFO methods (Wainwright, 2012, Chapter 5) After examining both methods I believe the company should switch from LIFO to the FIFO method. Using the FIFO method allows a company to keep more up to date inventory, because the items remaining in inventory were purchased more recently. Allowing the company to keep real time inventory numbers will help

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