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Accounting for inventory

Methods of calculating the cost of

inventory

 This is the actual  The first items of
cost of purchasing inventory
units of inventory. received are
assumed to be

the first ones
FIFO – sold.
Unit

cost First in,
first out

AVCO – LIFO –

Average Last in,

cost first out

 The cost
of an item
of inventory is  The last items
calculated taking of inventory are
the average of all assumed to be the
inventory held. first ones sold.

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