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  • First-In, First-Out: Intermediate Accounting 1

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    Jon Christian Miranda
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    The document discusses the measurement of inventory under Philippine accounting standards. It states that inventory shall be measured at the lower of cost or net realizable value according to PAS 2. Cost flow assumptions like first-in, first-out (FIFO) determine how inventory units are valued. Inventories can be interchangeable or not interchangeable, and specific identification is used for the latter. Periodic or perpetual inventory systems can also be used.

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    Inventory

    Original Title

    FIFO

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    The document discusses the measurement of inventory under Philippine accounting standards. It states that inventory shall be measured at the lower of cost or net realizable value according to PAS 2. Cost flow assumptions like first-in, first-out (FIFO) determine how inventory units are valued. Inventories can be interchangeable or not interchangeable, and specific identification is used for the latter. Periodic or perpetual inventory systems can also be used.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    Download as pptx, pdf, or txt
    10 views7 pages

    First-In, First-Out: Intermediate Accounting 1

    Uploaded by

    Jon Christian Miranda
    The document discusses the measurement of inventory under Philippine accounting standards. It states that inventory shall be measured at the lower of cost or net realizable value according to PAS 2. Cost flow assumptions like first-in, first-out (FIFO) determine how inventory units are valued. Inventories can be interchangeable or not interchangeable, and specific identification is used for the latter. Periodic or perpetual inventory systems can also be used.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 7

    First-in,

    First-out
    I N T E R M E D I AT E
    ACCOUNTING 1
    Measurement of Inventory
    PAS 2 , paragraph 9, provides that inventories
    shall be measured at Lower of Cost or Net
    Realizable Value”
    Measurement of Inventories

    Cost
    Inventories
    Net Realizable
    Value
    Illustration:
    The following data pertain to an inventory item:
    Date Transaction Units Unit Cost Total Cost Sales in Units
    Jan. 1 Beginning 800 ₱ 200.00 ₱ 160,000.00
    Balance
    Jan. 8 Sale 500
    Jan. 18 Purchases 700 ₱ 210.00 ₱ 147,000.00
    Jan. 22 Sale 800
    Jan. 31 Purchases 500 ₱ 220.00 ₱ 110,000.00

    The ending inventory is 700 units


    Measurement of Inventories

    Interchangeable

    Cost
    Not
    Inventories
    Interchangeable
    Net Realizable
    Value
    Measurement of Inventories
    Periodic

    First-in, First-out

    Perpetual

    Interchangeable

    Periodic
    Weighted
    Cost
    Average Perpetual
    Inventories (Moving
    Average)
    Net Realizable Not Specific
    Value Interchangeable Identification
    Measurement of Inventories
    Periodic

    First-in, First-out

    Perpetual

    Interchangeable

    Periodic
    Weighted
    Cost
    Average Perpetual
    (Moving
    Average)
    Not Specific
    Inventories
    Interchangeable Identification

    Net Realizable
    SP-ECC-ECD
    Value

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