Two methods of setting the costs of inventory on hand are _____.

Question

Quizplus · Accepted Answer

FIFO (First-In, First-Out) and LIFO (Last-In, First-Out) are two common methods of setting the costs of inventory on hand. FIFO assumes that the first items purchased are the first ones sold, while LIFO assumes that the last items purchased are the first ones sold. Both methods have their advantages and disadvantages, and the choice between them often depends on the nature of the business and the prevailing market conditions. Overall, however, FIFO and LIFO are widely used and accepted methods of inventory valuation that can provide businesses with valuable insights into their operations and financial performance.

Two Methods of Setting the Costs of Inventory on Hand