Q.1) what is inventory valuation? ANSWER:
An inventory valuation allows a company toprovide a monetary value for items that make uptheir inventory. Inventories are usually the largestcurrent asset of a business, and propermeasurement of them is necessary to assureaccurate financial statements. If inventory is notproperly measured, expenses and revenues cannotbe properly matched and a company could makepoor business decisions.The inventory accounting involves two majoraspects:
The cost of the purchased or manufacturedinventory has to be determined and
Such cost is retained in the inventory accountsof the company until the product is sold
) What are the method by which inventory canbe valued?
followings are the methods of inventory valuation-A.) COST PRICE METHOD:1.first in first out