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October 19, 2025, 05:34:07 pm
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Author Topic: Explain the impact of rising prices and the use of FIFO has on value of stock  (Read 1006 times)  Share 

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unmotivated

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Explain the impact of rising prices and the use of FIFO has on value of stock
« on: November 09, 2013, 04:33:19 pm »
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Explain the impact of rising prices and the use of FIFO has on the value of stock in the balance sheet.?
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TimmyC

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Re: Explain the impact of rising prices and the use of FIFO has on value of stock
« Reply #1 on: November 09, 2013, 04:38:39 pm »
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The total value of stock per item will increase because the lower priced stock items are leaving the business first (?)
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BoredSatan

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Re: Explain the impact of rising prices and the use of FIFO has on value of stock
« Reply #2 on: November 09, 2013, 04:52:31 pm »
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Because FIFO assumes that the first stock in to the business is sold first, this means that when prices are rising, we assume that we are selling the lower priced stock first, when in fact we might actually be selling the higher priced stock and thus stock control and owners equity would be overstated
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unmotivated

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Re: Explain the impact of rising prices and the use of FIFO has on value of stock
« Reply #3 on: November 10, 2013, 04:16:14 pm »
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thanks! I get it now :)
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