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Valuation of Inventories: A Cost-Basis Approach (for Tues 26 and Thur 28)
Learning Objectives 1.Identify major classifications of inventory. 2.Distinguish between perpetual and periodic inventory systems. 3.Identify the effects of inventory errors on the financial statements. 4.Understand the items to include as inventory cost. 5.Describe and compare the cost flow assumptions used to account for inventories. 6.Explain the significance and use of a LIFO reserve. 7.Understand the effect of LIFO liquidations. 8.Explain the dollar-value LIFO method. 9.Identify the major advantages and disadvantages of LIFO. 10.Understand why companies select given inventory methods.