Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period. Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization. The various inventory cost flow methods are: First-in, first-out (FIFO) Last in, first-out (LIFO) Average-cost Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period. To determine: The cost of ending inventory under the average-cost method.

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Chapter 6, Problem 4BE

To determine

Periodic Inventory System: It is a system in which the inventory is updated in the accounting records on a periodic basis such as at the end of each month, quarter or year. In other words, it is an accounting method which is used to determine the amount of inventory at the end of each accounting period.

Inventory cost flow: It refers to the flow (movement) of inventory when it is purchased or sell by the business organization.

The various inventory cost flow methods are:

First-in, first-out (FIFO)

Last in, first-out (LIFO)

Average-cost

Average-cost method: In average-cost method, the value of inventory is calculated by the average of cost of goods sold which are available for the sale purpose for that period.

To determine: The cost of ending inventory under the average-cost method.

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