LIFO Method Research Articles

A Web-based Information System of Receivables and Supplies with LIFO Method

A Web-based Information System of Receivables and Supplies with LIFO Method

An Analysis Of Internal Control System Of Merchandise Inventory At Toko Saga Motor Panorama In Bengkulu City

This study aims is to find out whether the analysis of the internal control system for merchandise inventory at Toko Saga Motor Panorama in Bengkulu City is in accordance with the control system according to Mulyadi (2016: 488). The theory associated with the title explained is the internal assessment system. Toko Saga Motor Panorama in Bengkulu City, carries out cash and credit sales as an effort to attract as many customers as possible to Toko Saga Motor Panorama in Bengkulu City. This research is a type of descriptive research. The data collection method was carried out by observation, interviews and documentation obtained Toko Saga Motor Panorama in Bengkulu City. The results of this research show that the internal assessment system for merchandise inventory at Toko Saga Motor Panorama in Bengkulu City is not in accordance with the control system according to Mulyadi (2016: 488) so it can be said that it has not been carried out effectively. This can be seen from Toko Saga Motor Panorama in Bengkulu City which does not have its own control system and does not have adequate storage and there are no operations in the organizational structure at Toko Saga Motor Panorama in Bengkulu City because it is only carried out by two people who run all the divisions. In determining the inventory valuation method, the company uses the LIFO method because the last item will be the cost of goods sold. This will provide greater profits compared to the FIFO method.

PERHITUNGAN PERSEDIAAN BARANG DAGANG MENGGUNAKAN METODE FIFO DAN LIFO

Several methods of calculating or recording stock inventory that are popularly used are the
 FIFO, LIFO, and Average methods. In accounting, inventory can be calculated in several
 methods, where this method can be adjusted to the type of company and also the interests of the
 company. The research objective is to find out how to calculate the Ending Inventory, Cost of
 Goods Sold using the FIFO and LIFO methods. The research results show that the calculation of
 Inventory Value, Cost of Goods Sold using the FIFO and LIFO methods gives different results.
 Inventory cost flow method with FIFO assumes the cost flow of outgoing inventory is taken from
 the cost of the first incoming inventory. The LIFO method assumes the first units of inventory
 purchased will be issued last.

PENERAPAN METODE FIFO DAN METODE LIFO DALAM MENJAGA EFEKTIVITAS PERSEDIAAN PUPUK (STUDI KASUS PT. CAHAYA PELITA ANDHIKA) KABUPATEN TAPANULI TENGAH

Abstrak. The purpose of this research is to find out the right method to achieve optimal profit at PT. Andhika's lamp. Meanwhile, the formulation of the problem in this study is how this research method uses a descriptive quantitative approach with the ex post facto research method, namely research on data collected after the event occurred. The research was conducted by examining purchase cards and use cards in 2021. The conclusion of this study is that within a one-year period it can be concluded that the ending inventory value generated using the FIFO method is Rp. 118,840,000, while the LIFO method produces an ending inventory value of Rp. 124,440,000, the LIFO method is the opposite of the FIFO method, which produces a high cost of use so that the resulting profit is low. Based on the conclusions of the research results using the FIFO method, when the acquisition price increases using the LIFO method will be able to produce a high cost of production, this is the impact of the average trend in determining the cost of using fertilizer and ending inventory and reducing the effect of excessive price changes. high or low so that future costs will be more stable.

Comparison of Efficiency between FIFO AND LIFO Methods for Food and Beverage Business Sector

Comparison of Efficiency between FIFO AND LIFO Methods for Food and Beverage Business Sector

Inventory Calculation System by Predicting The Amount of Sales of The Eye Shop Using The Moving Average Method

For a company, inventory is an asset that is quite large in value. The existence of inventory in a company implies whether there is an inventory or not. Business is an activity in the field of trade with the intention of making a profit. There are various types of businesses that are around us. Inventory is one of the current assets that must be managed properly, especially for the type of business that has an inventory of merchandise. Inventories that are owned by this type of business will be able to be determined at the cost of the inventory and the value of the inventories will be presented on the balance sheet. In calculating the value of the company's inventory, the company can use three methods, namely the FIFO, LIFO and Average methods. The moving average method is used if the past data is data that does not have an element of trend or seasonal factors. Moving average forecasting is widely used to determine the trend of a time series. The main purpose of using moving averages is to eliminate or reduce randomness in the time series. So that it can provide information on incoming and outgoing goods based on transaction reports so that it can predict the number of sales in the next period. It is hoped that this application will always be up to date so that this application follows the development of sales information technology based on Android Flutter.

Sistem Penerapan Metode Pencatatan Dan Penilaian Persediaan Barang Dagang Di Togamas

The purpose of this study was to determine how the system of applying the method of recording and valuing merchandise inventory in TOGAMAS Toko Buku Diskon Singaraja. This research was a quantitative research. The data collection technique used was documentation. Data analysis techniques used in this study were two methods, namely the inventory assessment method consisting of the FIFO method, the LIFO method, and the Average method. The recording method was also divided into two, namely the Periodic Inventory System and the Perpetual Inventory System. All that had been examined in this study showed significant results related. For this reason, it is expected that Togamas Toko Buku Diskon Singaraja should always apply the system of recording and valuing merchandise inventory that has been carried out so far.

Innovative approaches to conducting binary classes as an effective means of forming professional competencies among future junior specialists in higher education institutionsi II level of accreditation

The purpose of this paper is to analyze the effectiveness of conducting binaryclasses in two economic disciplines: enterprise economics and financial accounting.the research methodology includes the use of the following methods: analytical,which analyzes the correct use of the material; comparative, which compares theindicators of the use of the FIFO and LIFO methods; and verification method, whichverifies the use of various methods. the scientific novelty of the paper is inimproving the effectiveness of conducting binary classes and facilitating studentlearning. in conclusion, conducting an analysis of the effectiveness of using onetopic, which is studied by two disciplines in parallel, shows that knowledge of thetopic is actually based on the knowledge of two disciplines, which deepens andimproves student knowledge. Furthermore, innovative forms and methods ofconducting such an analysis may depend on the experience and knowledge of teachers.

Perlakuan Akuntansi Persediaan Barang Dagangan Dan Pengaruhnya Terhadap Beban Pokok Penjualan

Objectives to be achieved in this study is to know the accounting treatment of Merchandise Inventory which affects the Cost of Goods Sold on PT. Setia Makmur, Surabaya and can be used as input material of the company, to be able to use more accurate inventory method in determining Cost of Goods Sold in relation to Financial Statement. The accounting treatment for inventory is
 important for many companies, especially trading and manufacturing companies, as it has a significant effect on the presentation in the Balance Sheet and Income Statement. PT. Setia Makmur, Surabaya uses the Physical Method to record its inventory and LIFO Method (MTKP) to conduct an assessment of its Merchandise Inventory. The use of the Physical Method for the recording of Merchandise Inventory has a disadvantage from the point of internal control. The use of the LIFO Method (MTKP) in the Merchandise Inventory assessment is not in accordance with the Financial Accounting Standards which only allow the Special Identification Method, the FIFO Method (MPKP) and the Average Method. The mistake in choosing the right inventory valuation method will result in the presentation of Inventory, Cost of Goods Sold and Net Income which is overstated or understated.

George R. Husband: Contributions to the Development of Accounting Thought

George R. Husband, accounting educator, was a leader in research, service and teaching. His former students and admirers endowed a chair, three scholarships and an annual lecture series in his memory nearly forty years after his death in 1958. This article highlights his lasting accomplishments by examining his research (e.g., as an opponent of the LIFO method of inventory valuation, an advocate of price-level accounting and major proponent of the proprietary theory of financial accounting, and as one of the most prolific authors in The Accounting Review), service (e.g., as Vice President and President of the American Accounting Association) and teaching. We also discuss Husband's research in the context of other notable contemporary scholars and those whose works are consistent with Husband's thoughts.

Connecting LIFO Adoption and LIFO Liquidation with Survival Analysis

Using a sample of firms that adopted the LIFO method of inventory valuation, this paper uses survival analysis to examine the length of time that elapses between the adoption of LIFO and the initial liquidation of LIFO inventory. Prior research in the area of LIFO liquidation uses cross-sectional or pooled, cross-sectional data to model either the change in the LIFO reserve or the probability of a LIFO liquidation within a specific year. This research uses longitudinal data to examine the effect of tax and non-tax costs on the expected time to liquidation after the adoption of LIFO. The results suggest that length of time is influenced by changes in demand for a firm's products and earnings management. The initial liquidation of LIFO inventory is driven by changes in firm sales and the ability of the income effect of the liquidation to allow a firm to exceed prior year's earnings. Unlike earlier research, tax and liquidity considerations appear to play no role in the decision to liquidate inventory. The results in the paper suggests that modeling the length of time that precedes the occurrence of an event and modeling the occurrence of an event itself are independent research questions and that variables that influence outcome need not necessarily influence duration. Given that a large amount of accounting research uses choice-based models to examine the occurrence of events, the results suggest that placing choice-based research within a survival analysis framework has the potential to yield new insights.

Agency, corporate control and accounting methods–the lifo‐fifo choice

AbstractThe study examines the effect of the firm's ownership structure on its management's choice of LIFO or FIFO inventory valuation methods. Managers of widely held firms are found to select the accounting method that furthers their own interests, thus causing the firms' owners to bear agency costs that appear to be substantial.

Inventory Accounting Switch and Uncertainty

Typically, a LIFO firm may not switch back to the FIFO method except after being approved by the Commissioner of the Internal Revenue Service and paying a tax penalty, but a FIFO firm can adopt the LIFO method at low cost.1 In a world of uncertainty, the ability to postpone an irreversible decision is a valuable option. In this paper we identify, in an option framework, trade-offs involving current tax savings obtainable from a LIFO switch and the value of a timing option of postponing the switch. We show that it can be optimal to forego certain current LIFO tax savings when the future economic environment is uncertain.2

The effect of inventory costs on the LIFO layer liquidation decision

Due to double digit inflation during the latter part of the past decade, many companies have switched to the LIFO method of inventory valuation. LIFO layer liquidation occurs whenever a company which uses the LIFO inventory valuation method decides to reduce ending inventory to a level below beginning inventory. During inflationary periods, a company that allows this liquidation to occur will have to pay higher federal income taxes. This paper develops a decision rule of whether or not management should make a special purchase to avoid LIFO layer liquidation. The tradeoffs involved with this special purchase are reduced federal income taxes coupled with higher carrying costs and order or setup costs. Since some carrying costs are tax deductible and some are not, most of the carrying costs are considered individually in developing the decision model. The tax deductible costs that are considered are the cost of capital, property tax, insurance costs, handling costs, and warehouse costs. The carrying costs considered that are not tax deductible are the risk or probability of deterioration and obsolescence. Since the costs and tax payment occur at different points in time, the present value of each of these transactions are made for comparison purposes. The decision rule is based on a comparison between the present value of these costs and the present value of the cost of a LIFO layer liquidation. An example is then used to illustrate the decision rule.

An Application of Income Strategy to Cost Allocation and Segment Reporting

Is a company's decision to allocate common costs to its industry segments related to its overall income strategy? The results of this study indicate that companies that allocate common costs tend to be larger, to have lower debt-equity ratios, to have higher rates of return on common stock, and to use the LIFO method of inventory valuation more than companies that do not so allocate or that report they do not have common costs. This evidence implies that companies that allocate common costs may be influenced by the same economic factors as companies following an overall income-reducing financial reporting strategy.

On the Differences between Accrual Accounting Figures and Cash Flows: The Case of Working Capital

'See, for example, Bierman and Smidt [2], pp. 153-154; Levy and Sarat [6], p. 69; and Brealey and Myers [3], p. 85. various accounting procedures to evaluate the level of current assets. Therefore, it would not be surprising if, practical capital budgeting analysis, there would be a wide use of accounting procedures to evaluate the level of working capital. The use of these methods raises many crucial conceptual and practical difficulties. For example, should one use market or cost basis to evaluate inventories and receivables? Should one use FIFO, LIFO, or other methods to evaluate inventories? Which costs should be capitalized: fixed costs, variable costs, out-of-pocket costs, administrative, selling, etc.? The purpose of this paper is not to raise arguments for or against the various accrual accounting methods, but to investigate the relationship between some of these methods and the cash flows of a given project. It is shown here that if the actual cash flows occur only at the beginning and end of the accrual accounting periods, then there is a simple relationship between the

Effects of Shareholder Information on Corporate Decisions and Capital Market Equilibrium

This paper examines the effect that imperfectly informed capital market agents have on the equilibrium paths of output, investment, and asset prices of value maximizing firms. Though information is imperfect, rational expectations is imposed as an equilibrium condition. It is found that both asset prices and corporate decisions are simultaneously affected in such a way that the efficiency-optimality relationship between them is pre- served. The effect of a fuller information structure is to move the economy from one efficient markets equilibrium to another. elaborated. Extant beliefs regarding accounting information are crystallized at two polar extremes. Policy-making bodies like the SEC and the FASB and most prac- titioners believe that investors are naive in processing information, and are principally concerned with the earnings per share figure as reported by accoun- tants. Investor decision rules are invariant to the rules for computing income, and therefore if the right or proper measure of income were not adopted, investors would be misled. In recent years stock price researchers have rapidly accumulated evidence against this naive investor hypothesis and in favor of the efficient markets hypothesis. For example, Kaplan and Roll (12) demonstrated that firms switching from the deferral method to the flow-through method for investment credit and firms switching from accelerated to straight-line deprecia- tion, in each case increasing their reported income, did not experience abnormal price increases. Sunder (23) found that firms switching from the FIFO to the LIFO method of inventory valuation, thereby decreasing their reported income, did not suffer in stock price performance. These findings raise a serious question. Do accounting statements have any informational impact on security prices at all? Several studies tested and rejected the null hypothesis that the periodic financial statements issued by corporations have no information content for capital market agents. Ball and Brown (1) tested for information content of the annual earnings report and found that foreknowledge of the earnings number could be used to generate excess returns. Brown and Kennelly (5) replicated the

Discussion of Accounting Methods and Management Decisions: The Case of Inventory Costing and Inventory Policy

To provide a frame of reference, I should preface my comments with several observations on my personal perspective with respect to the review of Mr. Biddle's study.-First, as a business executive, I have had direct experience with the considerations involved in making a choice between the use of LIFO or FIFO inventory valuation methods. I might add that this involvement has also necessitated the ongoing review and analysis of the impact of such an election. Second, I am personally interested in the economic consequences of accounting choices, both from the standpoint of a businessman and from the viewpoint of a participant in the standard-setting process. Finally, I should note that I do not have the perspective of a statistician experienced in sample structure and mathematical analyses. As a result, my comments are directed toward the approach taken in the study and the possible significance of the results, rather than to the statistical methodology employed. I conclude with a discussion of areas in which future research may be useful.

Selection of the LIFO Method of Inventory Valuation: Management's Motives and Investor's Reaction

Selection of the LIFO Method of Inventory Valuation: Management's Motives and Investor's Reaction

LIFO and Statistical Sampling—A Case Study

A growing number of case studies, describing the increasing number of applications of statistical sampling methods to accounting problems, have appeared in accounting literature. A substantial number, although not all, of these case studies have tended to emphasize the statistical aspects of the particular problem being described, at the neglect of accounting considerations. This is understandable in the sense that statistical techniques are relatively new to the accounting profession and new techniques, rather than the old, require exposition. However, the fruitful use of statistics in accounting requires full consideration of both statistical and accounting aspects of any particular problem. With this point of view, the following case study describing the statistical and accounting problems encountered in an adoption of the LIFO method of valuing inventory is presented.