Merchandising companies need to have inventory available to sell to the consumer, creating a need to identify how to account for the purchase and sales of the inventory. In addition, there are costs associated with having inventory. You have been asked to propose an inventory system to handle the accounting for the purchasing and selling of merchandise. The company needs to also understand how to handle the accounting for the costs of inventory.

• You are to select the inventory system for the purchasing and selling of inventory, and define the differences, if any, between how it is handled under GAAP and IFRS. You need to also explain how your selection will have an effect on the accounting for the costs of the inventory.