| Inventory is an important part of financial report, especially in trading company, because of its high value that can affects the company’s operating income. The amount of operating income will be one of the factors to measure company’s performance. In this thesis, writter uses PT Sentral Warna Prima Jaya as a research object. PT Sentral Warna Prima Jaya is a company that engaged in trading workshops supplies, especialy supplies for body repair. This company uses FIFO method to value its inventory. In this thesis, writter makes a comparison between the influence of FIFO method and average cost method on company’s gross profit. By the comparison, it can be concluded that FIFO method makes a higher amount of cost of goods sold so that it makes a lower amount of gross protif than average cost method. Based of the analysis, it can be concluded that the inventory costing method used by PT Sentral Warna Prima Jaya is already match with the generally accepted accounting principles |