Question
2. What are the differences in recording transactions related to the purchase of inventory items and related costs when using the perpetual inventory system vs.
2. What are the differences in recording transactions related to the purchase of inventory items and related costs when using the perpetual inventory system vs. the periodic inventory system? (See figure 8.3 p. 225 and figure 8.4 p.226 in the text).
3. Given what you know about the FIFO and LIFO methods of inventory costing, which method would show ending inventory on the balance sheet near replacement cost? Why?
4. Why is it necessary for some companies to use the FIFO, LIFO or Averaging inventory valuation methods instead of the Specific Identification method?
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