Specific Unit Cost When units are sold, the specific cost of the unit sold is added to cost of goods sold
First-In, First-Out (FIFO) Cost of Goods Sold Ending Inventory Oldest Costs Recent Costs
First-In, First-Out (FIFO) $10 Beginning Inventory $12 Purchase 5 shirts Then we sell 4 shirts for $20 each. What costs should be assigned to Cost of Goods Sold? First-In, First-Out Cost of good sold = $42Inventory = $48
First-In, First-Out (FIFO) GENERAL JOURNAL DATEDESCRIPTION REF DEBITCREDIT Accounts Receivable ($20 x 4)80 Sales Revenue80 To record sales on account Cost of Goods Sold42 Inventory42 To record cost of sales
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