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Using the FIFO (First-In, First-Out) method, what is the value of the closing stock for the month of September 2024, given the following inventory transactions?
Using the FIFO (First-In, First-Out) method, what is the value of the closing stock for the month of September 2024, given the following inventory transactions?
- 4,880 (correct)
- 4,900
- 4,800
- 4,920
A company uses the FIFO method for inventory valuation. In a period of rising prices, which of the following statements is true?
A company uses the FIFO method for inventory valuation. In a period of rising prices, which of the following statements is true?
- The cost of goods sold (COGS) will be lower, resulting in higher net income.
- The cost of goods sold (COGS) will be the same as with any other inventory valuation method.
- The impact on cost of goods sold (COGS) will depend on sales volume.
- The cost of goods sold (COGS) will be higher, resulting in lower net income. (correct)
Which of the following best describes the primary assumption underlying the FIFO (First-In, First-Out) inventory valuation method?
Which of the following best describes the primary assumption underlying the FIFO (First-In, First-Out) inventory valuation method?
- Inventory items are sold in random order.
- The average cost of all inventory items is used to determine the cost of goods sold.
- The newest inventory items are sold first.
- The oldest inventory items are sold first. (correct)
A business switched from using weighted average method of inventory valuation to FIFO. How does this change typically impact their financial statements during a period of rising prices?
A business switched from using weighted average method of inventory valuation to FIFO. How does this change typically impact their financial statements during a period of rising prices?
Company X has beginning inventory of 100 units at $10 each. They purchase 200 units at $12 each and then sell 150 units. Under FIFO, what is the cost of goods sold?
Company X has beginning inventory of 100 units at $10 each. They purchase 200 units at $12 each and then sell 150 units. Under FIFO, what is the cost of goods sold?
Flashcards
What does FIFO mean?
What does FIFO mean?
FIFO assumes that the first units purchased are the first ones sold.
How is closing stock valued under FIFO?
How is closing stock valued under FIFO?
Under FIFO, closing stock is valued at the cost of the most recent purchases.
What are the given stock details?
What are the given stock details?
Opening Stock: 250 units at ₹10 each. Purchases: 5.9.24: 150 units at ₹12 each, 15.9.24: 100 units at ₹14 each, 25.9.24: 200 units at ₹16 each. Issues: 10.9.24: 120 units, 20.9.24: 80 units, 30.9.24: 150 units.
How many units were issued from each purchase?
How many units were issued from each purchase?
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What is the value of closing stock?
What is the value of closing stock?
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Study Notes
- The task is to find the amount of closing stock under the FIFO (First-In, First-Out) method for September 2024.
- The opening stock on 1.9.24 was 250 units at ₹10 each.
Purchases
- On 5.9.24, 150 units were purchased at ₹12 each.
- On 15.9.24, 100 units were purchased at ₹14 each.
- On 25.9.24, 200 units were purchased at ₹16 each.
Issues
- On 10.9.24, 120 units were issued.
- On 20.9.24, 80 units were issued.
- On 30.9.24, 150 units were issued.
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Description
Calculate closing stock using the FIFO (First-In, First-Out) method. This problem provides purchase and issue data for September 2024. Determine the quantity and value of the remaining stock at the end of the month.
