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Average Cost or Weighted Average
method for assigning inventory cost to sales, the cost of available-for-sales units is divided by the number of units available to determine per unit cost prior to each sale, when is then multiplied by the units sold to yield the cost of that sale
First In First Out (FIFO)
method to assign cost to inventory that assumes items are sold in order acquired; earliest items purchased are the first sold.
Last in Last Out (LIFO)
method for assigning cost to inventory that assumes costs for the most recent items purchased are sold first and charged to cost of goods sold.
Lower of cost or market (LCM)
required method to report inventory at market replacement cost when that market cost is lower than recorded cost; applies to firms using LIFO.
Market Value
is the price of an asset on the market-place based on the prices buyers are willing to pay and what sellers are willing to accept.
Net Realizable Value
expected selling price (value) of item minus the cost of making the sale.
Specific Identification
method for assigning cost to inventory when the purchase cost of each items in inventory is identified and used to compute COGS and/or cost of inventory.
