FIFO and LIFO Are the Two Most Common Cost Flow

question 88

Essay

FIFO and LIFO are the two most common cost flow assumptions made in costing inventories. The amounts assigned to the same inventory items on hand may be different under each cost flow assumption. If a company has no beginning inventory explain the difference in ending inventory values under the FIFO and LIFO cost bases when the price of inventory items purchased during the period have been (1) increasing (2) decreasing and (3) remained constant.

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Definitions:

Independent Contractor

A person or entity engaged in a work performance agreement who is not considered an employee and does not receive employee benefits.

Agent

An individual authorized to act on behalf of another person or entity, often in business transactions or negotiations.

Simple Delivery Contract

An agreement focusing on the delivery of an item or service without complicated terms.

Agent Deliver

An act where an individual or entity designated as an agent carries out the delivery of goods or documents on behalf of another party.