For merchandising firms, inventory items are valued at acquisition cost which includes

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Inventory valuation for merchandising firms includes the invoice price less any cash discounts (reflecting the actual cost of purchase), plus additional costs directly related to bringing the inventory to a sellable condition and location, such as transportation, receiving, unpacking, inspecting, and shelving. Costs to record the purchases in the accounts are considered period costs and are not included in inventory valuation.

For Merchandising Firms, Inventory Items Are Valued at Acquisition Cost