Hinson 9-3 Company of the term - inventory method

Hinson 9-3 Company of the term - inventory method -...

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Intermediate Accounting I Assignment 9-3 Company of the Term – Inventory Method Jamie Hinson March 3, 2008 From what I can tell by the Scotts Miracle-Gro Company’s 2007 annual report, they use the FIFO (first in-first out) periodic inventory system. The FIFO Periodic Inventory System is the most common inventory system because it seems to make the most sense and is easier to use. FIFO just means that the first inventory that is purchased by the company is the first inventory to be sold by the company. FIFO is a much smarter choice to use for this specified company due to the types of inventory that the company sells needs to be as fresh as possible. Periodic just means that the company doesn’t record their sales, purchases, and such immediately as the
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Unformatted text preview: transaction is taking place. All information for that specific is recorded at the end of the recording period. The opposites of the FIFO Periodic Inventory System would be either FIFO Perpetual Inventory System, LIFO Periodic Inventory System, or LIFO Perpetual Inventory System. LIFO simply means last in – first out, which states that the inventory most recently purchased will be the first to go out. Perpetual simply means that the company records all such transactions immediately. This can tend to be a pain for companies that have a lot of sales, purchases, returns, etc....
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