M5A2 Assignment.docx - Running head M5A2 ASSIGNMENT TEXTBOOK ACTIVITY M5A2 Assignment Textbook Activity FIFO and LIFO Inventory Methods The Accounting

M5A2 Assignment.docx - Running head M5A2 ASSIGNMENT...

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Running head: M5A2 ASSIGNMENT: TEXTBOOK ACTIVITY1M5A2 Assignment: Textbook ActivityFIFO and LIFO Inventory Methods: The Accounting Implications during InflationExcelsior College
M5A2 ASSIGNMENT: TEXTBOOK ACTIVITY2Textbook ActivityFIFO and LIFO Inventory Methods: The Accounting Implications during Inflation Inflation is defined as “the rate which the general level of prices for goods and services isrising, and subsequently, purchasing power is falling” (Investopedia, n.d.). Inflation’s effect on accounting is very significant; each company must be aware of the impact of inflation and choose the most appropriate method for the inventory management. One of the generally accepted ways to gauge inventory cost is First-In, First-Out (FIFO) cost method (Harrison, 2013). Under the FIFO method, goods are used in the order they are purchased; the first goods purchased are the first to be used in manufacturing or sold as

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