As a result, inventory is a critical component of the balance sheet. Inventory can be valued using a few different accounting methods, including first In, first out (FIFO) and last in, first out ...

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an adjustment must be made to the inventory value entry on the balance sheet. Such a situation would usually occur because of a negative change in the market value of the inventoried asset.

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Here's what each aspect of the balance sheet equation represents: Assets: Assets are resources with quantifiable value, such as cash, inventory or money the company is owed. They are often split ...

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