List and Briefly Describe the Four Kinds of Inventory Discussed

question 82

Essay

List and briefly describe the four kinds of inventory discussed in the text,the purpose of each kind,and the main type of control used for each type.

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Definitions:

FIFO

"First In, First Out," an inventory valuation method that assumes the first items placed in inventory are the first sold.

LIFO

Last In, First Out, an inventory valuation method where the latest items added to inventory are the first to be sold.

Cost of Goods Sold

Cost of Goods Sold (COGS) refers to the direct costs attributable to the production of the goods sold in a company.

Periodic Inventory System

An inventory accounting system where updates are made at intervals, such as monthly or annually, rather than continuously.