The oldest cost is assigned to the cogs pl and the

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Unformatted text preview: still on hand. The oldest cost is assigned to the COGS (P/L), and the newer costs are assigned as the value of the inventory. COGS and the inventory value are based on the average costs of the similar inventory items in the period. The most recently incurred costs are assigned as the COGS (P/L), and the older costs are assigned as the value of the inventory. Association of effort with Rational and systematic (inter period) allocation accomplishment 7 • Beginning Inventory + Available for Sale • Even though the periodic and the perpetual approaches differ in the timing of adjustments to inventory . . . . . . COGS and Ending Inventory Cost are the same under both approaches. 8 How closely do reported costs reflect actual flow of inventory? How well are costs matched against related revenues? 9 • • • • • 10 11...
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