FIFO + LIFO valuation of inventory balance

DannyT90DannyT90 Surrey Posts: 160AAT Student, AATQB
Can anyone help me understand abit better why when then FIFO Costing method is used that the inventory balance is valued at the most RECENT purchase cost?

Is this because what's left in stock is mostly the most recent purchased items?

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Answers

  • DannyT90DannyT90 Surrey Posts: 160AAT Student, AATQB
    Yeah that's what I thought but I wanted a second opinion, thanks for that.

    What's IAS 2?
  • BertieBertie West Midlands Posts: 376Registered
    International accounting standard 2 -

    It stipulates how inventories should be accounted.

    From memory you'll start to see accounting standards in level 3.
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