Every company has the ability to determine the inventory valuation method they will use and still be
Question:
Every company has the ability to determine the inventory valuation method they will use and still be well within GAAP. However, each of these methods has an effect on financial statements and the users of that information should have a good understanding of the effects.
A research paper comparing and contrasting the procedures associated with the different types of inventory valuation methods and the effects they can have on the financial reporting for a company. The methods are the following:
Specific identification
Average for both COGS and EI
FIFO – (first-in, first-out) for COGS, and
LISH (last-in, still here) for EI
LIFO – (last-in, first0out) for COGS, and
FISH (first-in, still here) for EI
3-4 page(s) in length.
Three to five peer-reviewed journal articles are required. Reference all sources using APA format.
Expert Answer:
There are three basis approaches to valuing inventory that are allowed by GAAP a Firstin Firstout FIFO Under FIFO the cost of goods sold is based upon the cost of material bought earliest in the perio... View the full answer
