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Davidson Hardware

Price: $1.99

S6-1 Inventory accounting principles [5 min]
Davidson Hardware used the FIFO inventory method in 2012. Davidson plans to
continue using the FIFO method in future years.

1. Which inventory principle is most relevant to Davidson’s decision?

S6-2 Inventory methods [5 min]
Davidson Hardware does not expect prices to change dramatically and wants to use
a method that averages price changes.


1. Which inventory method would best meet Davidson’s goal?

2. What if Davidson wanted to expense out the newer purchases of goods instead?
Which inventory method would best meet that need?

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