FIFO and LIFO Are the Two Most Common Cost Flow

question 60

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 cost of inventory items purchased during the period have been (1) increasing, (2) decreasing, and (3) remained constant.

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Definitions:

Antibacterial Agent

A type of antimicrobial designed specifically to fight bacteria and prevent their growth or reproduction.

Streptomyces Lasaliensis

A species of actinobacteria, known for producing antibiotics and other bioactive compounds.

Alkyl Magnesium Halide

A type of Grignard reagent, which is a key reagent in organic synthesis, involving an alkyl group bonded to magnesium and a halogen.

Grignard Reaction

A chemical reaction in which an alkyl, vinyl, or aryl-magnesium halide (Grignard reagent) adds to a carbonyl group in an aldehyde or ketone.