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Chapter 6: Assigning Costs to Merchandise

  • Page ID
    98038
    • Henry Dauderis and David Annand
    • Athabasca University via Lyryx Learning

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    Learning Objectives
    • LO1 – Calculate cost of goods sold and merchandise inventory using specific identification, first-in first-out (FIFO), and weighted average cost flow assumptions — perpetual.
    • LO2 – Explain the impact on financial statements of inventory cost flows and errors.
    • LO3 – Explain and calculate lower of cost and net realizable value inventory adjustments.
    • LO4 – Estimate merchandise inventory using the gross profit method and the retail inventory method.
    • LO5 – Explain and calculate merchandise inventory turnover.
    • LO6 – Calculate cost of goods sold and merchandise inventory using specific identification, first-in first-out (FIFO), and weighted average cost flow assumptions — periodic.

    Recording transactions related to the purchase and sale of merchandise inventory was introduced and discussed in Chapter 5. This chapter reviews how the cost of goods sold is calculated using various inventory cost flow assumptions. Additionally, issues related to merchandise inventory that remains on hand at the end of an accounting period are also explored.


    This page titled Chapter 6: Assigning Costs to Merchandise is shared under a CC BY-NC-SA 3.0 license and was authored, remixed, and/or curated by Henry Dauderis and David Annand (Lyryx Learning) .

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