Question

Recall the four inventory costing methods used to assign costs to inventory and cost of goods sold under the periodic inventory system?

1) FIFO (First-In, First-Out)
2) LIFO (Last-In, First-Out)
3) Weighted Average
4) Specific Identification

Answer 1

The four inventory costing methods used to assign costs to inventory and cost of goods sold are FIFO, LIFO, Weighted Average, and Specific Identification.

Step-by-step explanation:

The four inventory costing methods used to assign costs to inventory and cost of goods sold under the periodic inventory system are:

1. FIFO (First-In, First-Out): This method assumes that the first items entering the inventory are the first ones sold. It assigns the oldest costs to cost of goods sold and the newest costs to inventory.
2. LIFO (Last-In, First-Out): This method assumes that the last items entering the inventory are the first ones sold. It assigns the newest costs to cost of goods sold and the oldest costs to inventory.
3. Weighted Average: This method calculates the average cost per unit of inventory by dividing the total cost of goods available for sale by the total number of units available for sale. It assigns this average cost to both cost of goods sold and inventory.
4. Specific Identification: This method assigns the actual cost of each individual item to the cost of goods sold and inventory. It is typically used for high-value items or products with unique characteristics.