Table of contents

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1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

5. Inventory

Periodic Inventory - FIFO, LIFO, and Average Cost

Financial Accounting

5. Inventory

Periodic Inventory - FIFO, LIFO, and Average Cost

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Multiple Choice

The letters FIFO refer to which of the following inventory costing methods?

Fastest-In, Fastest-Out

Final-In, First-Out

First-In, Final-Out

First-In, First-Out

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Verified step by step guidance

Understand that FIFO stands for 'First-In, First-Out,' which is an inventory costing method used in accounting.

Learn the concept: FIFO assumes that the oldest inventory items (the ones purchased or produced first) are sold or used first.

Recognize the importance of FIFO in financial accounting, as it impacts the cost of goods sold (COGS) and inventory valuation on the balance sheet.

Compare FIFO with other inventory costing methods, such as LIFO (Last-In, First-Out) and Weighted Average, to understand its unique characteristics.

Apply FIFO in practice by organizing inventory records to ensure the earliest costs are assigned to items sold, while the remaining inventory reflects the most recent costs.