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Question: Chapter 5 is concerned with accounting for and presenting current assets. Inventory accounts for a large portion of a company's current assets. How that asset is valued is a very important issue for both the company and others outside the company (i.e. government (IRS)). The chapter discusses three methods for valuing its ending inventory. The methods are: 1-Weighted Average 2-FIFO (first-in, first-out) and 3-LIFO (last-in, first-out). See below 4 videos (2 videos just have a hyperlink) that focus on the FIFO and LIFO inventory valuation methods. The first video describes FIFO, the second video describes LIFO. The third video compares FIFO methodology to LIFO methodology. The final video highlights an actual dilemma car dealers are facing today if congress forces them to change from the LIFO to the FIFO valuation method. Your assignment is to review the two videos then in your own words describe the car dealers' problem if their inventory valuation method has to be changed. (Your explanation should include a definition of FIFO and LIFO and a comparison of the two methods.) Your assignment posting must be at least 200 words.
Videos: 1. LIFO vs. FIFO (By BeckySavage)
2. LIFO Accounting Method Should Not Be Repealed (By NADALegislative)
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