Chapter 6: Inventories Flashcards
1
Q
Valuing Inventory
A
- FIFO
- LIFO
- Weighted Average Cost
2
Q
FIFO
A
Oldest units are sold first
3
Q
LIFO
A
The newest units are sold first
4
Q
Weighted Average
A
Cost per unit = cost of units purchased / number of units purchased
5
Q
Increasing Prices under FIFO
A
- Lower COGS
-> Higher Profit - Higher Inventory
6
Q
Increasing Prices under LIFO
A
- Higher COGS
-> Lower Profit - Lower Inventory
7
Q
Inventory Write Down
A
COGS Dr & Inventory Cr
