In 2014,a Company Changed from the FIFO Method of Accounting

question 9

Short Answer

In 2014,a company changed from the FIFO method of accounting for inventory to LIFO.The company's 2013 and 2014 comparative financial statements will reflect which method or methods?

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Definitions:

Perpetual Inventory System

An inventory management system where updates to inventory records are made in real-time following each sale or purchase transaction.

FIFO

An inventory valuation method that assumes the first items acquired are the first ones sold, standing for First-In, First-Out.

Last-in, First-out

An inventory valuation method where the most recently produced or purchased items are the first to be expensed, often used to manage costs and taxes.

Last-in, First-out Method

An inventory valuation method where the goods purchased last are considered sold first for cost of goods sold calculation.