Answer:
Inventory is the complete list of the items or the list of stock such as goods, properties, etc.
Explanation:
Inventory are defined as the stock of the goods and the materials that the business holds in order to ultimate goal of a resale. Inventory management is the discipline that is primarily about specifying shape and the placement of the stocked goods. There are various inventory methods. FIFO as well as LIFO are the important inventory methods.
The full form of FIFO is first in first out while the full form of LIFO is last in first out.
LIFO -- it maximizes the reported income.
Specific unit cost -- they are used for account of the automobiles, art objects and jewelries.
FIFO -- it results in the cost of the ending inventory which is close to current cost of the replacing inventory.
LIFO -- it generally associated with the savings income taxes.
LIFO -- it enables the company to buy a high cost inventory method at the year end.
LIFO -- it results old measure of a cost ending inventory.
Average cost -- it provides the middle ground measure of the ending inventory and also the cost of the goods sold.
FIFO -- it enables the company in order to keep the reported income from the dropping lower by the liquidating of the older layers of the inventory.
applies to all the four methods -- writes the inventory down when the current replacement cost drops to the below historical costs.
LIFO -- it matches the current cost of the goods that are sold against the sales revenue.
