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  2. FIFO and LIFO accounting - Wikipedia

    en.wikipedia.org/wiki/FIFO_and_LIFO_accounting

    The difference between the cost of an inventory calculated under the FIFO and LIFO methods is called the LIFO reserve (in the example above, it is $750, i.e. $5250 - $4500). This reserve, a form of contra account , is essentially the amount by which an entity's taxable income has been deferred by using the LIFO method.

  3. Inventory valuation - Wikipedia

    en.wikipedia.org/wiki/Inventory_valuation

    The perpetual system records revenue each time a sale is made. Determining the cost of goods sold requires taking inventory. The most commonly used inventory valuation methods under a perpetual system are: first-in first-out (FIFO) last-in first-out (LIFO) (highest in, first out) (HIFO) average cost or weighted average cost

  4. Cost of goods sold - Wikipedia

    en.wikipedia.org/wiki/Cost_of_goods_sold

    Costs of specific goods acquired or made are added to a pool of costs for the type of goods. Under this system, the business may maintain costs under FIFO but track an offset in the form of a LIFO reserve. Such reserve (an asset or contra-asset) represents the difference in cost of inventory under the FIFO and LIFO assumptions.

  5. Cost accounting - Wikipedia

    en.wikipedia.org/wiki/Cost_accounting

    An important part of standard cost accounting is a variance analysis, which breaks down the variation between actual cost and standard costs into various components (volume variation, material cost variation, labor cost variation, etc.) so managers can understand why costs were different from what was planned and take appropriate action to ...

  6. Average cost method - Wikipedia

    en.wikipedia.org/wiki/Average_cost_method

    The average cost is computed by dividing the total cost of goods available for sale by the total units available for sale. This gives a weighted-average unit cost that is applied to the units in the ending inventory. There are two commonly used average cost methods: Simple weighted-average cost method and perpetual weighted-average cost method. [2]

  7. FIFO - Wikipedia

    en.wikipedia.org/wiki/FIFO

    FIFO in stock rotation, particularly to avoid food spoilage; FIFO (computing and electronics), a method of queuing or memory management Queue (abstract data type), data abstraction of the queuing concept; FIFO and LIFO accounting, methods used in managing inventory and financial matters

  8. Specific identification (inventories) - Wikipedia

    en.wikipedia.org/wiki/Specific_identification...

    When this information is found, the amount of goods is multiplied by their purchase cost at their purchase date to get a number for the ending inventory cost. In theory, this method is considered the most accurate since it directly relates the ending inventory goods to the specific price they were bought for.

  9. Backflush accounting - Wikipedia

    en.wikipedia.org/wiki/Backflush_accounting

    Cost of ending inventory can be calculated by using the LIFO or FIFO inventory accounting methods, or other less common methods. The end of the accounting period is considered usually the end of each month because otherwise some taxes like the VAT (value added tax) cannot be charged. The monthly stock-taking is the main disadvantage of the ...