51) In a merchandising business, gross margin is the difference between sales revenue and the cost of goods sold.
52) In a time of increasing inventory costs, FIFO gives us a higher COGS number compared to the weighted average method.
53) FIFO income typically is less realistic compared to the net income under weighted-average cost.
54) A company may use more than one type of inventory method. For example it may use specific identification for one type of inventory and FIFO for another.
55) In Canada most companies use the FIFO method.
56) FIFO uses "old" inventory costs against revenue.
57) The specific unit cost method is frequently used for items with common characteristics, such as gallons of paint.
58) When using the weighted-average cost method to determine the cost of inventory, the weighted-average cost per unit is calculated as the cost of goods available for sale divided by the number of units available for sale.
59) Ending inventory under FIFO reflects the cost of goods most recently acquired.
60) When the lower-of-cost-or-net-realizable-value rule is applied to inventory, the effect will always reduce asset value on the balance sheet and net income on the income statement.