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FIFO Method in Inventory Accounting

The document discusses inventory accounting methods, specifically the First In First Out (FIFO) method, which treats inventory as a current asset. It outlines the periodic method, where balances update monthly, and the perpetual method, which updates balances after each transaction. Additionally, it mentions the weighted average method, requiring a new price determination after each purchase.

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Mj Farley
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0% found this document useful (0 votes)
52 views1 page

FIFO Method in Inventory Accounting

The document discusses inventory accounting methods, specifically the First In First Out (FIFO) method, which treats inventory as a current asset. It outlines the periodic method, where balances update monthly, and the perpetual method, which updates balances after each transaction. Additionally, it mentions the weighted average method, requiring a new price determination after each purchase.

Uploaded by

Mj Farley
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Accounting

Topic 3 – Inventory

FIFO Method

First In First Out Method

Inventory is counted as a current asset

Periodic method , balance will update after a month

Perpetual the balance updates after every transaction

Weighted average method is also used

Whereby after every purchase we need to determine a new price

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