LIFO And FIFO Inventory Accounting (Perpetual Inventory Vs Periodic Inventory Method)

Accounting

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Accounting for LIFO and FIFO inventories for both the periodic method and perpetual method for each LIFO and FIFO inventories (LIFO inventory costing, FIFO inventory costing), (1) FIFO inventory method where First-In, First-Out (FIFO) first goods purchased (or made) are used first, determine cost of ending inventory and cost of goods sold by taking the cost of oldest purchase and working forward until it accounts for all units in inventory, for the (1) periodic method the cost of goods sold and ending inventories are calculated based on the total sales (with drawals) for the period and (2) perpetual method attach the cost to each withdrawal, in all cases where FIFO is used the inventory and cost of goods sold would be the same at the end of the period whether using a perpetual or periodic system, (2) LIFO inventory method Last-In, First-Our (LIFO) where last goods purchased (made) are used first, determine cost of ending inventory and cost of goods sold by taking the most recent purchase and working backward until it accounts for all units in inventory, (1) periodic method the cost of goods sold and ending inventories are calculated based on the total sales (with drawals) for the period and (2) perpetual method attach the cost to each withdrawal, detailed accounting calculations by Allen Mursau

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29 Comments

  1. Chen Bai says

    what a mess!

  2. Herbert Ponder says

    The 450 @ $22 for LIFO Periodic COGS should be $9,900, not $9,000 (which makes COGS = 29,900). It’s easier to calculate Ending Inventory by subtracting total COGS ($22,900) from the total $ spent on purchases ($36,600) to get your answer ($13,700).

  3. jinuwine240 says

    You are going too fast in this video, slow down!

    1. tilaR says

      just pause lmfao.

  4. Ryan Geiger says

    Thanks man helped alot. 

  5. Christian Rodriguez says

    I have my test in 5 hrs and you sir saved my life!

  6. edges101010 says

    Way to fast and you shoul break it down in steps. Don’t just have it all out there at once

    1. Josue rodriguez says

      You should take out a piece of paper and write everything you see and here. you’ll have to pause a lot but after an hour of analyzing you’ll get what hes saying.

    2. yeliraiza says

      +Josue rodriguez LOL he should break it down though….I mean the whole point of the video is to show how to do it.

    3. Josue rodriguez says

      +yeliraiza O_o HOw did you FIND MEEE!!
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    4. yeliraiza says

      +Josue rodriguez lol idk o_o

  7. Aaron Lee says

    Thanks for the help. You’re not going to fast.

  8. Miranda McCaslin says

    I don’t get why in LIFO perpetual that you don’t use the left over unit purchased for the next units sold and why you don’t take it at the price of the left over units purchased.

    1. videosuid says

      +Miranda McCaslin
      I have the same question…

    2. Frazer Mann says

      +Miranda McCaslin if you look at 11:32 on the 10th of June there was an order for 200 units, so they were taken from the inventory of units costing $20. On the 11th of June, 800 units were purchased therefore these are now at the top of the inventory and are the FIRST OUT or the next order, so when the next order of 500 units comes in on the 15th of June the order is filled using these units. If the order had been over 800, ie 850, then the 1st 800 units would come from the $22 units and the remaining 50 would then come from the $20 units.

      Hope this helps.

    3. David Williams says

      It’s wrong.

  9. Frazer Mann says

    great vid, thanks very much.

  10. Lucy Ma says

    0:12, 7:53

  11. Mia Huang says

    So the calculations between periodic and perpetual are basically the same?

    1. Xiti Amin says

      +Mia Huang only for fifo

  12. Corine Lewis says

    How would I input obsolete stock into the systems, would I enter the obsolete stock into the cost of goods sold at being sold for nothing?

  13. Geekella says

    thank you!

  14. Anand Rajiv says

    Thank you so much , this explanation made life a lot easier

  15. YomYom04 says

    life saver

  16. Hello everybody says

    Finally got it. Thank goodness.

  17. M.Ameer says

    why didn;t we use the $500 for calculating cogs for perioidic fifo? Can anyone explain?

    1. Akeed Manuideen says

      because when you use the FIFO method you use up all the old inventory first. In the example for FIFO only 950 units were sold and it was taken out of the stocks from 6/1 and 6/11 which was sufficient

  18. rinaa rinn says

    i don’t understand how to get 250 in perpetual FIFO .

  19. Nick Dodson says

    this video is horrid. absolute mess and terribly explained

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