Financial Accounting – Inventory Costs

Discover inventory tracking concepts and common tracking methods, including specific identification, FIFO, LIFO, and weighted average methods.

Access a downloadable pedia file to supplement the instructional video on inventory tracking. Use this file to reinforce core concepts in inventory costs.

Track inventory on the balance sheet and income statement using a forklift example. Learn how specific identification and cost flow methods affect cost of goods sold and net income.

Explore inventory methods, including FIFO, LIFO, and Ave, and compare their implications in financial accounting. Access a downloadable pedia file to supplement the instructional video.

Compare FIFO, LIFO, and the average method using a coffee mug example to show how cost flows affect inventory and net income.

Learn which items constitute inventory costs, including purchase price, shipping, insurance, and discounts, and compare perpetual versus periodic methods for recording cost of goods sold.

Download the pedia file to supplement the instructional video, providing additional reference material and a clearer understanding of the topics covered.

Determine what to include in inventory costs, such as purchase price, freight under f.o.b. terms, tariffs, storage, insurance, discounts, and consignment, applying conservatism to damaged or obsolete items.

Download a pedia file to supplement the instructional video for this lecture on the 20 consistency concept.

Apply the consistency principle to inventory flow assumptions, such as first in, first out, last in, first out, and average method, to maintain comparability and understand effects on net income.

Access a downloadable pedia file that supplements the instructional video on the lower of cost or market in inventory costs.

Apply the lower of cost or market rule to inventory, comparing cost to replacement cost and recording the lower amount. This prevents asset overstatement when replacement cost falls below cost.

Download a pedia file to supplement the instructional video on perpetual and periodic inventory systems for financial accounting inventory costs.

This lecture compares perpetual and periodic inventory systems, explaining how sales affect accounts receivable, inventory, and cost of goods sold, and how end-of-period physical counts adjust inventory.

Apply the consistency principle to inventory methods such as FIFO, LIFO, average, and specific identification, ensuring same estimates across periods for comparable balance sheets and income statements.

Explore the periodic system and the first in, first out cost flow assumption, where items purchased first are sold first, with a note that similar principles appear in perpetual systems.

Access a downloadable pedia file to supplement the instructional video, reinforcing the first in, first out (FIFO) periodic system in financial accounting.

Learn FIFO under a periodic system, compare with perpetual and other cost flow methods, using a detailed worksheet to compute purchases, ending inventory, and cost of goods sold.

The next presentation includes an Excel worksheet that we can download to analyze inventory costs.

Apply first-in, first-out under a periodic inventory system, recording purchases and ending inventory on a worksheet, and compute cost of goods sold and ending balance via an end-of-period adjustment.

Explore how inventory costing methods—FIFO, LIFO, and average cost—along with specific identification, affect assets and cost of goods sold under rising prices.

Explore the periodic system using the last in, first out method, contrast it with FIFO and the middle average method, and preview perpetual system implications.

Explore the pdf resource on last in, first out lifo periodic inventory costing, with a downloadable pedia file to supplement the instructional video.

Explore last in, first out LIFO in a periodic inventory system, tracking beginning inventory, purchases, ending inventory, and cost of goods sold, with comparisons to FIFO and average.

Get ready to download an Excel worksheet from the upcoming presentation for inventory cost calculations in financial accounting.

Demonstrates last in first out inventory calculations under a periodic system, detailing purchases, ending inventory, and cost of goods sold through a worksheet and journal entries.

Compare the perpetual and periodic inventory systems, noting how perpetual updates sales and cost of goods sold, while periodic relies on end-of-period physical counts.

Explore inventory cost concepts through multiple-choice scenarios on damaged stock and goods in transit. Compare f.o.b. shipping point and destination and understand when freight payments affect inclusion in inventory.

Explore the periodic weighted average method within a periodic system, balancing FIFO and LIFO flow assumptions by averaging inventory costs for sales.

Access a downloadable pedia file to supplement the instructional video in this financial accounting course on inventory costs.

Learn the weighted average periodic inventory method, compare it with fifo and lifo, and compute ending inventory and cost of goods sold using an end-of-period count.

Learn how to access and download an Excel worksheet included in the upcoming presentation for inventory costs in financial accounting.

Master the weighted average cost method in a periodic inventory system by building a worksheet, calculating unit cost, posting journal entries, and computing ending inventory and cost of goods sold.

Analyze how an ending inventory error over or under counts assets and equity, and affects cost of goods sold, gross profit, and net income under perpetual or periodic methods.

Explain consignment concepts, including consignor and consignee, and show how to allocate cost of goods available for sale between ending inventory and cost of goods sold, plus included inventory costs.

this lecture explains applying the perpetual fifo method to inventory costing, recording reductions in inventory and cost of goods sold as each sale occurs, unlike the periodic system.

Discover how first in, first out is explained in this lecture and access a downloadable supplementary file to reinforce key concepts in inventory costs.

Explore the first in, first out (fifo) inventory method and how to track cost of goods sold, ending inventory, and journal entries using a multi-layer worksheet.

Access and download the Excel worksheet featured in the upcoming presentation to reinforce learning on inventory costs.

Apply first in, first out inventory costing to value ending inventory and cost of goods sold from beginning inventory, purchases, and a sale, with journal entries.

Apply first in, first out to inventory costs, compute cost of goods sold and its impact on net income, and post journal entries for purchases and sales amid rising prices.

Compare periodic and perpetual inventory systems, recording purchases to inventory and recognizing cost of goods sold only at period end via physical count, adjusting for freight and discounts.

Explore multiple-choice questions on inventory cost flows, including physical counts in perpetual systems, shrinkage adjustments, and how methods like FIFO, LIFO, and weighted average affect net income.

Explains how the perpetual system records inventory reductions and cost of goods sold using last in, first out (LIFO), and compares it to the periodic approach.

Explore the last in, first out (LIFO) inventory method explained in this presentation, with a downloadable pedia file as a supplement to the instructional video.

Explain the last in, first out method with a coffee mug example, detailing a cost flow worksheet, purchases, and computing cost of goods sold and ending inventory.

The next presentation includes a downloadable excel worksheet for inventory costs that you can download.

Explore the last-in, first-out method by solving a concrete inventory cost problem, contrasting with FIFO and weighted average, and recording purchases, sales, ending inventory, and cost of goods sold.

Apply last-in, first-out costing in a perpetual inventory system to post purchases and sales and calculate cost of goods sold and ending inventory across multiple layers.

Explain how to determine inventory cost in dollars by including purchase price, freight, storage, insurance, discounts, and lower of cost or market, with costs expensed as cost of goods sold.

Explore how different inventory cost flow assumptions—specific identification, average, FIFO, LIFO, and weighted average—affect cost of goods sold, taxes, and net income.

Compute ending inventory and cost of goods sold under a weighted average perpetual system, using purchases, sales, and unit costs; apply first-in, first-out and adjust inventory errors.

Explore the perpetual system application of the weighted average method as a cost flow assumption, recording inventory and cost of goods sold continuously rather than at period end.

Download the supplementary pdf from the next presentation and use it with the instructional video to understand the average inventory method.

Explore the average inventory method and use a worksheet to convert inventory to a $54 per unit cost, yielding cost of goods sold of 22,680 and ending inventory of 4,320.

download the excel worksheet included in the next presentation to access and review the data.

Apply the weighted average method to an inventory problem, compute the average cost per unit, and post journal entries for purchases, sales, and cost of goods sold.

Learn to apply the average method to compute and update per-unit inventory cost from multiple purchases, including recording accounts payable and cost of goods sold to assess net income.

Explain how to apply the lower of cost or market rule to inventory, recording at cost and writing down to replacement cost when lower, guided by conservatism and regulatory goals.

Explore multiple choice questions on inventory cost flows, including specific identification, FIFO, LIFO, weighted average, and the impact of declining prices, plus conservatism and lower of cost or market.

Compute inventory values using the lower of cost or market, apply perpetual FIFO to determine cost of goods sold and ending inventory, and use the gross profit method for estimates.

Explore definitions and key terms related to cost flow assumptions and the cost of inventory. See how these definitions apply to the topic and gain perspectives relevant to exams.

Learn weighted average cost method to value inventory by dividing cost of available-for-sale units by total units, then apply the average to units sold to determine cost of goods sold.

Conservatism constraint defines using the less optimistic estimate when estimates are equally likely to avoid overstating assets and understating liabilities, such as valuing inventory at 12,000.

Define consignee as the receiver of goods owned by another who holds them to sell, illustrating inventory ownership and revenue flow in a consignment with wine or art.

Identify the consignor as the owner of goods held by another who will sell them for the owner, keeping ownership while the consignee holds the inventory. Use wine and art examples to illustrate how revenue flows to the consignor at sale.

Define the consistency concept as using the same inventory cost flow method over time to keep financial statements comparable across periods, avoiding switches between FIFO, LIFO, specific identification, or average.

Define days sales in inventory as ending inventory divided by cost of goods sold, times 365, to estimate days to convert inventory into a sale or cash.

Define the first in, first out inventory method as a cost flow assumption, selling oldest purchases first and calculating cost of goods sold and ending inventory from the example.

Define gross profit as net sales minus cost of goods sold, expressed on multistep income statements to show the relationship between net sales, inventory costs, and gross margin.

Interim financial statements cover periods under one year, three or six months, including the balance sheet at a point in time and the income statement, cash flows, and equity statements.

Define inventory turnover as the number of times a company’s average inventory is sold, also called merchandise turnover, calculated as cost of goods sold divided by average inventory.

Define last in first out as a cost flow assumption for inventory, where the latest purchases are sold first, not matching specific identification or physical flow.

Define the lower of cost or market as reporting inventory at market replacement cost when the market cost is lower than recorded cost. Apply the example where 15,000 becomes 12,000.

Define net realizable value as expected selling price minus completion and selling costs, used to decide inventory valuation under the lower of cost or market principle.

Define the retail inventory method and estimate ending inventory from the cost-to-retail ratio, using the example of 140 cost and 200 retail, to compare with physical counts.

explain specific identification as assigning exact costs to each inventory item to compute cost of goods sold, with a forklift example, and note alternatives like fifo, lifo, or average.

Explore how the weighted average method, a cost flow assumption, assigns available-for-sale costs to sales by averaging across units, then calculate the cost of goods sold and ending inventory.

Explore inventory cost methods including specific identification, retail method, FIFO, and LIFO, and explain how beginning and ending inventory affect cost of goods sold and net income.