Asked by Cristina Valadez on May 18, 2024
Verified
In a perpetual inventory system the cost of goods sold under the FIFO method is based on the cost of the latest goods on hand during the period.
Perpetual Inventory System
An inventory system under which the company keeps detailed records of the cost of each inventory purchase and sale, and the records continuously show the inventory that should be on hand.
FIFO Method
An inventory valuation method that assumes the first items placed into inventory are the first sold, thus expenses are based on the oldest costs.
Latest Goods On Hand
Refers to the most recent inventory of products or materials that a company has available for use or sale.
- Identify the core principles and consequences of differing inventory costing techniques including LIFO, FIFO, and specific identification.
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Learning Objectives
- Identify the core principles and consequences of differing inventory costing techniques including LIFO, FIFO, and specific identification.
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