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What is Inventory Accounting Methods Explained about?

This document discusses accounting for inventories for merchandising and manufacturing firms. For merchandising firms, inventories are valued at cost using methods like FIFO, LIFO, and weighted average. The lower of cost or market principle requires writing down inventories if the fair market value falls below cost. Manufacturing firms use raw materials, work-in-process, and finished goods inventory accounts and apply absorption costing to capitalize production costs into inventory values.

Author

onsongoalexmunavi

Language

EN