Inventoriable Costs/Cost-Flow Assumptions (graded)
We read about the Perpetual and the Periodic Inventory System. Regardless of which system is used, under both, we need to assign dollar amounts to the Ending Inventory and Cost of Goods Sold so that we can trace how costs flow through the system.
1) Start by identifying what is included in inventory and then
2) discuss how each item might be treated differently in the Perpetual vs. the Periodic Inventory System.