In this unit, we will explore the various methods used to determine the value of inventory in accounting. These methods include:
The LCM method is used to value inventory at the lower of its cost or its current market value. The retail method and gross profit method, on the other hand, are used to estimate the cost of inventory when a physical inventory cannot be taken or perpetual inventory records are not maintained.
Through this unit, we will delve into the complexities of inventory valuation and gain a better understanding of the various methods used to value and estimate inventory in the world of accounting.