Perpetual Inventory System Using the FIFO Cost Assignment Method

What this note covers

1. The Perpetual Inventory System: Core Principles
2. FIFO Cost Assignment: How It Works
3. Recording Purchases — Including Freight-In
4. Recording Sales — Dual Entry Requirement
5. Purchase Returns and Sales Returns
6. The Continuous Record and the Matching Principle
7. Extracting the Income Statement: Gross Profit and Operating Profit

7 sections · 14 key terms & formulas · 6 common mistakes