
Concept explainers
a
Introduction:
The Periodic inventory system of recording the inventory records includes updating the inventory accounts only after the end of regular periodic intervals. Therefore, the cost of goods sold and the cost of ending inventory is computed at the end of the period.
First in first out method implies that the goods received first have been issued first for the purpose of computing the cost of goods sold.
Cost of ending inventory and cost of goods sold under FIFO method.
b
Introduction:
The last in first out method implies that the inventory which has been received most recently is issued first for the purpose of the cost of goods sold.
Cost of ending inventory and cost of goods sold under LIFO.
c
Gross Profit is the difference between the sales revenue and the cost of goods sold during the period. It refers to the gross margin earned on the sale of the product.
Gross Profits of the business under both the methods.

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Chapter 5 Solutions
Gen Combo Ll Financial Accounting Fundamentals; Connect Access Card
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