Chapter 9 inventory stock valuation
Sponsored Links
This presentation is the property of its rightful owner.
1 / 8

Chapter 9 Inventory (stock) valuation PowerPoint PPT Presentation


  • 141 Views
  • Uploaded on
  • Presentation posted in: General

Chapter 9 Inventory (stock) valuation . Inventory (stock) valuation . A good estimate of closing stock is provided by three methods of stock valuation: First-In-First-Out (FIFO) Method Last-In-First-Out (LIFO) Method Average Cost (AVCO) Method . First-In-First-Out (FIFO) Method.

Download Presentation

Chapter 9 Inventory (stock) valuation

An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -

Presentation Transcript


Chapter 9Inventory (stock) valuation


Inventory (stock) valuation

A good estimate of closing stock is provided by three methods of stock valuation:

  • First-In-First-Out (FIFO) Method

  • Last-In-First-Out (LIFO) Method

  • Average Cost (AVCO) Method


First-In-First-Out (FIFO) Method

In this method we assume that the first set of inventory received is the first to leave the warehouse. The resulting ending inventory will be valued at current prices.


First-In-First-Out (FIFO) Method

Stock valuation schedule (FIFO)

January 1, 2006 - June 30, 2006


Last-In-First-Out (LIFO) Method

In this method we assume that the last set of inventory received is the first to leave the warehouse. The resulting ending inventory will be valued at older prices.


Last-In-First-Out (LIFO) Method

Stock valuation schedule (LIFO)

January 1, 2006 - June 30, 2006


Average Cost (AVCO) Method

In this method, each time goods are purchased we calculate a new average cost of inventory. The average cost is calculated using the equation

Average cost of inventory=

Total value of goods on hand ÷ Quantity of goods on hand

The resulting ending inventory will be valued at the last calculated average.


Average cost (AVCO) Method

Stock valuation schedule (AVCO)

January 1, 2006 - June 30, 2006


  • Login