FIFO- Perpetual inventory System: FIFO (First in first out) method assumes the flow of inventory in the same order of its purchase. In other words, the oldest purchase is assumed to be sold first in order of purchases made. The FIFO method can be applied using perpetual or periodic method. In the perpetual inventory method, the inventory balance is updated after each inventory transaction. Adjusting entries : Adjusting entries are recorded at the end of each accounting period to adjust the accounts as per accrual basis of accounting. To show: The adjusting entries and their posting into ledgers

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Chapter 6, Problem 5CP

To determine

Concept Introduction:

FIFO- Perpetual inventory System: FIFO (First in first out) method assumes the flow of inventory in the same order of its purchase. In other words, the oldest purchase is assumed to be sold first in order of purchases made. The FIFO method can be applied using perpetual or periodic method. In the perpetual inventory method, the inventory balance is updated after each inventory transaction.

Adjusting entries: Adjusting entries are recorded at the end of each accounting period to adjust the accounts as per accrual basis of accounting.

To show: The adjusting entries and their posting into ledgers

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