ACC 311 Class 12 PPT Ch 7 no notes

Methods inventory costing methods 1 specific

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ing Methods 1. Specific Identification 2. First-in, First-out 3. Last-in, First-out 4. Weighted Average Total Dollar Amount of Goods Total Dollar Amount of Goods Total Total Available for Sale Available for Sale Available Available Inventory Costing Method Ending Inventory Ending Inventory Cost of Goods Sold Cost of Goods Sold 7-6 Specific Identification When units are When units are sold, the sold, the specific cost off specific cost o tthe unit sold is he unit sold is added to cost added to cost off goods sold.. o goods sold 7-7 Cost Flow Assumptions The choice of an inventory costing method is not based on the physical flow of goods on and off the shelves. FIFO LIFO Weighted Average 7-8 First-In, First-Out Method Oldest Costs Oldest Costs Cost of Cost of Goods Sold Goods Sold Recent Costs Recent Costs Ending Ending Inventory Inventory 7-9 Last-In, First-Out Method Oldest Costs Oldest Costs Ending Ending Inventory Inventory Recent Costs Recent Costs Cost of Cost of Goods Sold Goods Sold 7-10 Average Cost Method When a unit is sold, the When a unit is sold, the average cost off each unit average cost o each unit iin inventory is assigned to n inventory is assigned to cost of goods sold. cost of goods sold. Cost of Goods Available for ÷ Sale Number of Units Available for Sale 7-11 Financial Statement Effects of Costing Methods Advantages of Methods Advantages of Methods First-In, First-In, First-Out First-Out Last-In, Last-In, First-Out First-Out Weighted Weighted Average Average Ending inventory Ending inventory Ending Ending approximates approximates current current replacement cost. replacement cost. replacement replacement Better m...
View Full Document

Ask a homework question - tutors are online