{"id":208,"date":"2024-09-06T16:47:30","date_gmt":"2024-09-06T16:47:30","guid":{"rendered":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/introduction-to-inventory-cost-flow-assumptions\/"},"modified":"2024-09-06T16:47:30","modified_gmt":"2024-09-06T16:47:30","slug":"introduction-to-inventory-cost-flow-assumptions","status":"publish","type":"chapter","link":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/chapter\/introduction-to-inventory-cost-flow-assumptions\/","title":{"raw":"Introduction to Inventory Cost Flow Assumptions","rendered":"Introduction to Inventory Cost Flow Assumptions"},"content":{"raw":"\n<h2>What you'll learn to do:&nbsp;Establish the cost of items in inventory<\/h2>\n<a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/30190040\/woman-3040029_1920.jpg\"><img class=\"aligncenter size-medium wp-image-4660\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/30190040\/woman-3040029_1920-300x200.jpg\" alt=\"A woman holding shopping bags.\" width=\"300\" height=\"200\"><\/a>\n\nThe term <em>cost flow assumptions<\/em> refers to the manner in which costs are removed from a company's inventory and are reported as the COGS. In the U.S., the common cost flow assumptions are First-in, First-out (FIFO), Last-in, First-out (LIFO), and average. Additionally, there are ways to estimate ending inventory, such as the retail inventory method, and it is possible to assign costs to inventory using the actual cost of each item (specific identification method).\n","rendered":"<h2>What you&#8217;ll learn to do:&nbsp;Establish the cost of items in inventory<\/h2>\n<p><a href=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/30190040\/woman-3040029_1920.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-medium wp-image-4660\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/5107\/2020\/10\/30190040\/woman-3040029_1920-300x200.jpg\" alt=\"A woman holding shopping bags.\" width=\"300\" height=\"200\" \/><\/a><\/p>\n<p>The term <em>cost flow assumptions<\/em> refers to the manner in which costs are removed from a company&#8217;s inventory and are reported as the COGS. In the U.S., the common cost flow assumptions are First-in, First-out (FIFO), Last-in, First-out (LIFO), and average. Additionally, there are ways to estimate ending inventory, such as the retail inventory method, and it is possible to assign costs to inventory using the actual cost of each item (specific identification method).<\/p>\n","protected":false},"author":6,"menu_order":2,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Introduction to Inventory Cost Flow Assumptions\",\"author\":\"Joseph Cooke\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"cc\",\"description\":\"\",\"author\":\"gonghuimin468\",\"organization\":\"\",\"url\":\"https:\/\/pixabay.com\/photos\/woman-shopping-lifestyle-beautiful-3040029\/\",\"project\":\"\",\"license\":\"cc0\",\"license_terms\":\"https:\/\/pixabay.com\/service\/terms\/#license\"}]","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"part":206,"module-header":"","content_attributions":[{"type":"original","description":"Introduction to Inventory Cost Flow Assumptions","author":"Joseph Cooke","organization":"Lumen Learning","url":"","project":"","license":"cc-by","license_terms":""},{"type":"cc","description":"","author":"gonghuimin468","organization":"","url":"https:\/\/pixabay.com\/photos\/woman-shopping-lifestyle-beautiful-3040029\/","project":"","license":"cc0","license_terms":"https:\/\/pixabay.com\/service\/terms\/#license"}],"internal_book_links":[],"video_content":null,"cc_video_embed_content":{"cc_scripts":"","media_targets":[]},"try_it_collection":null,"_links":{"self":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/208"}],"collection":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/users\/6"}],"version-history":[{"count":0,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/208\/revisions"}],"part":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/parts\/206"}],"metadata":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapters\/208\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/media?parent=208"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=208"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/contributor?post=208"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/content.one.lumenlearning.com\/financialaccounting\/wp-json\/wp\/v2\/license?post=208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}