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When FIFO method is in use, the closing inventory is valued at

When FIFO method is in use, the closing inventory is valued at Correct Answer Recent cost paid

First In, First Out (FIFO):

  • The first in, first-out (FIFO) method of inventory valuation is a cost flow assumption that the first goods purchased are also the first goods sold.
  • In most companies, this assumption closely matches the actual flow of goods, and so is considered the most theoretically correct inventory valuation method.
  • The FIFO flow concept is a logical one for a business to follow since selling off the oldest goods first reduces the risk of inventory obsolescence.
  • Under the FIFO method, the earliest goods purchased are the first ones removed from the inventory account.
  • This results in the remaining items in inventory being accounted for at the most recently incurred costs so that the inventory asset recorded on the balance sheet contains costs quite close to the most recent costs that could be obtained in the marketplace.

Therefore, When the FIFO method is in use, the closing inventory is valued at the recent cost paid.

Related Questions

Consider an enclosure formed by three surfaces having the following values of shape factors, emissivities and temperatures Surface 1 i.e. curved cylindrical has an emissivity 0.75 and temperature 800 K Surface 2 i.e. closing disc has an emissivity 0.8 and temperature 700 K Surface 3 i.e. closing disc has an emissivity 0.8 and temperature 700 K The closing flat discs are 25 mm in diameter and they have interspacing distance equal to 100 mm. If the shape factor between these two identical discs is 0.05, calculate the net rate of radiant heat flow from the curve surface to each of the closing end surface
Assertion (A): Increasing the value of closing inventory increases profit.
Reason (R): Increasing the value of closing inventory reduces the cost of goods sold
In the context of the above two statements, which of the following is correct?
Assertion (A) Increasing the value of closing inventory increases profit.
Reason (R) Increasing the value of closing inventory reduces cost of goods sold.
Which of the following are methods of calculating goodwill?
1. Average profit method
2. Super profit method
3. Log method
4. Sum of years digit method
5. Capitalisation of average profit method
6. Capitalisation of super profit method
7. FIFO method
Select the correct answer:
Let x(t) be a continuous time periodic signal with fundamental period T = 1 seconds. Let {ak} be the complex Fourier series coefficients of x(t), where k is integer valued. Consider the following statements about x(3t):
1. The complex Fourier series coefficients of x(3t) are {ak} where k is integer valued.
2. The complex Fourier series coefficients of x(3f) are {3ak} where k is integer valued.
3. The fundamental angular frequency of x(3t) is 6π rad/s.
For the three statements above, which one of the following is correct?
At what value is the closing stock valued
Or
Stock is valued on
Given figures showing : Sales Taka 8,200, Opening inventory Taka 1,300, Closing inventory Taka 900, Purchases Taka 6+,400, Carriage inwards Taka 200, the cost of goods sold figure is :
If the beginning inventory is Tk 18,000, Purchase is Tk 86,000, Purchase return is Tk 4,000, Sales is Tk 1,20,000 and the mark-up on the cost is 25%, then what is the value of closing inventory?
Given: Opening inventory Rs. 3,500; Closing inventory Rs. 1,500; Cost of goods sold Rs. 22,000. What is the amount of purchase?
"Process B had no opening inventory. 13,500 units of raw material were transferred in at Rs 4.50 per unit. Additional material at Rs1.25per unit was added in process. Labour and overheads were Rs 6.25 per completed unit and Rs 2.50 per unit incomplete.
If 11,750completed units were transferred out, what was the closing inventory in Process B?"