- Compare and contrast the different inventory cost methods (FIFO, LIFO, average cost, and specific identification). What are the benefits of each approach? - Why do you think companies are required to report inventory at the lower of cost or net realizable value? How does the accounting concept of conservatism (companies should not overstate assets) apply here? - If a company has $100,000 in cost of goods sold and average inventory of $25,000, calculate the Inventory Turnover Ratio. Why is a higher number better? What does that ratio tell you about the company