The following units are available for sale during the year: January 1 Beginning inventory 10 units at $18 each April 3 Purchase 30 units at $12 each August 31 Purchase 28 units at $25 each Sept. 29 Purchase 17 units at $30 each Dec. 31 Ending Inventory 21 units yes Determined ending inventory cost by (a) FIFO method, (b) LIFO method, (c) average cost methods

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Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.