ACC205 WEEK 3 DISCUSSION 2.docx - Explain the four...

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Explain the four merchandise inventory methods and provide an example for each. Specific Identification Method - o An inventory costing method based on the specific cost of particular units of inventory.(Miller-Nobles, Mattison, & Matsumura, 2018) Example: Retailers use SKU numbers to identify merchandise by a bar code (each bar code has a number attached) along with the SKU numbers these tags include color codes, department codes, and size codes as well. Working in retail for about four years, and being a sales lead for a clothing store I became very familiar with SKU numbers and how we used them to determine products sold and we used them for a periodic story inventory. FIFO (First-In, First-Out) Method – o An inventory costing method in which the first costs into inventory are the first costs out to the costs of goods sold. Ending inventory is based on the costs of the most recent purchases.(Miller- Nobles, Mattison, & Matsumura, 2018)

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