Last In First Out (LIFO) | Inventory Cost Flows

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  • เผยแพร่เมื่อ 23 พ.ย. 2024

ความคิดเห็น • 147

  • @AccountingStuff
    @AccountingStuff  5 ปีที่แล้ว +7

    You can find the FIFO and AVCO videos in the Inventory Playlist (link in the vid description).
    ⏱️TIMESTAMPS
    00:00 - Intro
    00:48 - What is the Inventory Calculation?
    01:04 - What do Inventory Cost Flow Assumptions do?
    01:26 - What are Inventory Cost Flow Assumptions?
    01:38 - The three assumptions: FIFO, LIFO and AVCO
    01:50 - How LIFO works (Last In First Out)
    02:01 - Accounting with LIFO - Example
    02:57 - Step 1: Draw an Inventory Cost Flow Table
    03:10 - Step 2: Enter what you know
    04:32 - Step 3: Fill in the blanks
    06:52 - Step 4: Cost of Goods Sold and Closing Inventory
    07:30 - Advantage of LIFO
    07:44 - Disadvantage of LIFO
    08:01 - FIFO vs LIFO vs AVCO

  • @naterealestateAR
    @naterealestateAR 5 ปีที่แล้ว +49

    These video have taught me far more about accounting in far less time than my college courses. Much appreciated!! fantastic content

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว +2

      Glad to hear the vids are helping. All the best!

    • @HeatherBieber-n8r
      @HeatherBieber-n8r ปีที่แล้ว +1

      Knowing that so many students are learning more in James's videos than their accounting courses really makes me believe if I master these concepts in these videos, despite being confused in my current program, that I can be successful! Thank you for the content!

  • @jonfcbayern
    @jonfcbayern 5 ปีที่แล้ว +21

    Had my Accounting final a few hours ago. Just want to thank you James for all your videos! Exam went really well!! you're an absolute legend mate

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว +3

      Congrats Jon! Must be a weight off your chest getting through it. All the best

  • @Jack_Dab
    @Jack_Dab ปีที่แล้ว +1

    Having my final in like 30 minutes, this works a lot better than an exce sheet losely explaining all of this.
    I was a bit fuzzy on the details but this has really helped actually, thanks!

  • @bajoobiecuzican
    @bajoobiecuzican 4 ปีที่แล้ว +7

    I'm almost 60 yr old, and recently hired as a controller. I had a mediocre accounting background. Your videos are likely to help save my job!!! Thank you!!!!

    • @AccountingStuff
      @AccountingStuff  4 ปีที่แล้ว +1

      Good luck! I hope it works out well for you

    • @melindag11
      @melindag11 3 หลายเดือนก่อน

      What was your degree in

  • @kenyamaywatson7517
    @kenyamaywatson7517 3 ปีที่แล้ว +2

    I can't believe how easy this method is! That goes for FIFO and AVCO too, my college course totally confused me and took far longer explaining it!!! Thank you so so much, greatly appreciated:)

    • @AccountingStuff
      @AccountingStuff  3 ปีที่แล้ว

      Great to hear it's making sense! All the best :)

  • @Arkan-10
    @Arkan-10 5 หลายเดือนก่อน

    THANK YOU THANK YOU THANK YOU! I was so confused as to what ‘last inventory’ and ‘first inventory’ meant, thanks again!

    • @AccountingStuff
      @AccountingStuff  5 หลายเดือนก่อน

      You're very welcome, great to hear it's making sense :)

  • @vasilispap9234
    @vasilispap9234 3 ปีที่แล้ว +5

    i learnt everything about Inventory in less than an hour while my teacher couldn't do even half of it in 3 sessions. YOU ARE A GOD

  • @usmanalyas421
    @usmanalyas421 5 ปีที่แล้ว +14

    Love You Brother For these efforts you made for us.
    Really Appreciate That.
    Love From Pakistan 🌺🌺

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว

      Cheers Usman, it's a pleasure. Love from Canada!

  • @deepikashree.v9678
    @deepikashree.v9678 ปีที่แล้ว

    This really helps me for studying accounting in my undergrad. Your videos are a life saver!!!

  • @luisalonzo6135
    @luisalonzo6135 3 ปีที่แล้ว

    dude please do not stop making videos, all the info you give is very useful for reinforcing what im seeing in my classes.

    • @AccountingStuff
      @AccountingStuff  3 ปีที่แล้ว +1

      Cheers Luis, I plan to make many more :)

  • @ilkinmusayev2906
    @ilkinmusayev2906 4 ปีที่แล้ว

    one of the best explanations of FIFO i have ever seen

  • @stephenfraiku8348
    @stephenfraiku8348 4 ปีที่แล้ว

    Am happy to discover this because I didn't do Cost Accounting but you have made it easy for me to understand.

  • @phuchaonguyenluu986
    @phuchaonguyenluu986 3 ปีที่แล้ว

    I just wanna say that I like the way you impart the knowledge. It is just so engaging. Anyway, thanks a lot for helping me out with accounting. I really struggled without your videos ...

    • @AccountingStuff
      @AccountingStuff  3 ปีที่แล้ว

      No problem, great to hear you're finding these useful!

  • @emilypettigrew7771
    @emilypettigrew7771 4 ปีที่แล้ว

    Much thank you to this and the FIFO video. I was very confused how the online course I'm taking was getting the answer and this finally made me understand.

    • @AccountingStuff
      @AccountingStuff  4 ปีที่แล้ว

      No worries Emily, great to hear it's making sense

  • @workacc5270
    @workacc5270 5 ปีที่แล้ว +4

    I first encountered your Channel when you had 500 subs ! And now look at that! Soon surpassing 50k. Congrats ur crushing it

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว +1

      Hey there, thanks for dropping in again! Yeah things have been moving quicker lately. Cheers for the support

  • @ilayda9067
    @ilayda9067 4 ปีที่แล้ว +1

    Very clear and helpful video as always but I wish the example was different to solve as an exercise- not only to understand the topic. Thanks!

    • @AccountingStuff
      @AccountingStuff  4 ปีที่แล้ว

      Thanks for your feedback, I'll bear that in mind for future vids

  • @DonasTheArtist
    @DonasTheArtist 3 ปีที่แล้ว

    This mini-series is excellent

  • @thetechrealms7824
    @thetechrealms7824 4 ปีที่แล้ว

    I just checked online... GAAP allows LIFO. Neat.

  • @laurenewaaeeaqwreilly4514
    @laurenewaaeeaqwreilly4514 4 ปีที่แล้ว

    Thank you so much honestly you make it easy to understand

  • @dinkfam0682
    @dinkfam0682 4 ปีที่แล้ว +1

    I would greatly appreciate it if you made a video about dollar value LIFO. I am a new subscriber and I found your channel through my recommendations. I am currently studying for the FAR section of the CPA Exam and your videos have been very helpful!

  • @ccannon5784
    @ccannon5784 2 ปีที่แล้ว

    Thank you so much! Your videos are always well put together and helpful.

  • @ay7836
    @ay7836 3 ปีที่แล้ว

    keep going brother . u do better than my lect .

  • @cansuthaliaorkun8053
    @cansuthaliaorkun8053 5 ปีที่แล้ว

    Really looking forward for AVCO video, LIFO and FIFO was great!!

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว

      Cheers Cansu, the AVCO vid is now live

  • @melekdschejchan4335
    @melekdschejchan4335 5 ปีที่แล้ว

    Amazing video James, as always! I just wanted to comment that one of your videos really brought back my desire to study Accounting ( the one with the DEALER method ). Now my Accounting exam is in exactly 1 week, but I feel much more confident after watching your videos!
    I'm so happy that I'm not one of those people who let debiting and crediting make them give up on Accounting 😂 and it's only thanks to you!

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว

      Cheers Melek, great to hear that you've rediscovered the motivation to study. Good luck in your exam, I hope it goes well!

  • @danymathew7325
    @danymathew7325 ปีที่แล้ว

    greetings from Maastricht, Netherlands

  • @gaspardetienne487
    @gaspardetienne487 5 ปีที่แล้ว

    This serie of videos about the inventory cost may save my ass for my exam of tomorrow so thanks a lot. A recommendation for future a future video: How a company issue shares/ different types of shares ;)

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว +1

      Hey Gaspard, good luck in your exam!! Cheers for the suggestion

  • @vads8265
    @vads8265 4 ปีที่แล้ว +1

    Still can't get how could someone dislike this

  • @nu_xx5544
    @nu_xx5544 2 ปีที่แล้ว

    Thank you so much for this helpful video along with your other videos that are helping me a lot as a new accounting student. But I have 1 question and my final is tomorrow so hope u can help me. In LIFO should I record the beginning inventory or not? if yes then when should I record it and when I shouldn't.

  • @briannahenry6038
    @briannahenry6038 5 ปีที่แล้ว

    Thank you for sharing, please continue to upload. Superb content 👌

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว

      Thanks Brianna! There's plenty more to come

  • @jackieyap7563
    @jackieyap7563 5 ปีที่แล้ว

    Hi James. I really love your videos. They're really helpful. I hope you can make a video on analytical petty cash book and
    the imprest system in the future. I'm looking forward to it. Thanks

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว

      Hey Jackie, thanks for your suggestions! I'll keep those topics in mind for the future

  • @sinem3866
    @sinem3866 5 ปีที่แล้ว

    Yass, my final is in next month but I really do like your videos so I'm watching it now. Thank you for great videos ^-^ .

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว

      Ouch, so you'll have to revise over the Christmas holidays!

  • @laurenzruiz
    @laurenzruiz 5 ปีที่แล้ว

    Great video as usual James! Thanks for continually sharing your knowledge!
    I hope you can also do a video next time on BRANCH Accounting. What it is and how it is done correctly. Is this the accounting method used if you have multiple branches/locations? Also maybe a video on how to do BUDGETING, how to create a budget plan for a business. Really appreciate your work! Thanks again!

  • @Murtaza_Mohammadi
    @Murtaza_Mohammadi 7 หลายเดือนก่อน

    I really appreciate you 🙏 you are perfect

    • @AccountingStuff
      @AccountingStuff  7 หลายเดือนก่อน

      Thanks for your kind words :)

  • @AzaFayz
    @AzaFayz 5 ปีที่แล้ว

    Thanks for your work)
    Please, make a video about calculating operating, investing and financing activities)

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว +1

      Hey do you mean Cash Flow Statements? I've got a playlist on them here... th-cam.com/play/PL5zKSeS09l314wQmOtPEIaYnCGlLPUNIh.html

  • @mujahidahmed8
    @mujahidahmed8 5 ปีที่แล้ว

    James please explain the difference between AVCo and weighted average cost in your videos

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว

      Hey Mujahid, the Weighted Average Cost Method (WAVCO) and the Average Cost Method (AVCO) are the same thing. We'll cover it in the next video

  • @daphne4229
    @daphne4229 3 ปีที่แล้ว

    Do you know how incredible you are? I second the comment that you are a god!

  • @sabrinabueno665
    @sabrinabueno665 4 ปีที่แล้ว

    woww Fantastic content, im seeying all your videos

    • @AccountingStuff
      @AccountingStuff  4 ปีที่แล้ว

      Thanks Sabrina, glad you enjoyed it!

  • @michaelhale7802
    @michaelhale7802 5 ปีที่แล้ว

    Great tutorial, thanks for sharing

  • @christinaahn1887
    @christinaahn1887 4 ปีที่แล้ว

    I love the squeegees example. So fun saying it. lolll

  • @karinaortega9207
    @karinaortega9207 4 ปีที่แล้ว

    Great videos dude it helps alot even tho i haven't found an easier way for me to remember this,,I really wanted to know where did you get the 100 units from when you said
    1200+100x2 🤔🤔🤔

    • @bajoobiecuzican
      @bajoobiecuzican 4 ปีที่แล้ว

      You have to take 100 units from existing stock to account for the 500 units sold. Those 100 units cost $2 each. Thus the $200 + $1200 = $1400 this gives you the cost of goods

    • @karinaortega9207
      @karinaortega9207 4 ปีที่แล้ว

      @@bajoobiecuzican thank you for your reply this is where I get confused I appreciate it 😉

  • @APT951
    @APT951 5 ปีที่แล้ว

    Can you please make a video explaining the difference between GL accounting and auditing and any career tips for each? Right now I am a GL accountant for a consulting firm but I want to know if I should make a switch to auditing and if I have the skills to do so.

    • @APT951
      @APT951 5 ปีที่แล้ว

      PS. My eventual goal is to be a CFO but I don’t know if moving to audit will take me off track.

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว

      Thanks for the suggestion, I would like to make some more career-orientated vids in the near future. Moving to Audit could help speed things up for you significantly

  • @nadeenmei8906
    @nadeenmei8906 4 ปีที่แล้ว

    Great video! Is it possible you will make some videos for Cost Accounting Analysis?

  • @evafacila1719
    @evafacila1719 4 ปีที่แล้ว

    James, could you help me, please? 😅
    I am struggling to understand the best method to use for this particular question:
    "Suppose a company bases its evaluation of the purchasing officer for a refinery on the gross margin on the oil products produced and sold during the year. During the year, the price of a barrel of oil increased from 80 to 90 dollars. The value of the inventory of oil at the beginning of the year is 80 dollars or less per barrel. On the last day of the year, the purchasing agent is contemplating the purchase of additional oil at 0USD per barrel. Is the agent more likely to purchase additional oil if the company uses the FIFO or LIFO method for its inventories? Explain."
    I appreciate your kindness. Thank you 💜

  • @elifnisaguler6096
    @elifnisaguler6096 5 ปีที่แล้ว

    You're so good, i love u so much :) thanx for lecture

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว

      Cheers Elif, glad your enjoying the vids!

  • @AkshayKumar-yn3lj
    @AkshayKumar-yn3lj 5 ปีที่แล้ว

    You could also make videos on accounting frauds and mistake. Like show the other side of the world and how it is misused or manipulated.

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว +1

      Hey Akshay, that would be a really interesting series. Thanks for your suggestion!

    • @AkshayKumar-yn3lj
      @AkshayKumar-yn3lj 4 ปีที่แล้ว

      @@AccountingStuff Yeah and you know just to also be on the safe side, you can do on companies that have already shut down or closed. So you wont get any messages or notice from companies that you are shading them.
      For example, you can show how Enron manipulated their books. A company that has shut down.
      Now you might ask like why do on old companies or even older like some long forgotten companies, its because "Those who do not learn History are doomed to repeat it."
      There are countless ways a company has manipulated their books and so much so has been done under the sun. Would be a adventure to see how they did so, plus love learning more.
      (Yup i blame you for my interest in accounts man.....)
      Take care, have a great day.

    • @AccountingStuff
      @AccountingStuff  4 ปีที่แล้ว

      @@AkshayKumar-yn3lj Yeah good call. Have you watched the documentary "Smartest Guys in the Room"? So interesting!

  • @grantdraper77
    @grantdraper77 4 ปีที่แล้ว

    It would be helpful to put a rug or sound sheets in your studio to make for cleaner audio

  • @kanzashamim3573
    @kanzashamim3573 3 ปีที่แล้ว

    You are awesome 👏🏽

  • @samuelgoodluck8052
    @samuelgoodluck8052 4 ปีที่แล้ว +1

    Please can you make a video of final account of a sole trader... less I forget thanks a lot for your #lectures... I really appreciate 👍

  • @SuperKevin6464
    @SuperKevin6464 4 ปีที่แล้ว

    Would your opening balance cost per unit still be $2 in the next accounting period? If that's the case then will it be $2 forever until you sell all of your inventory?

  • @lucasolarreaga2570
    @lucasolarreaga2570 5 ปีที่แล้ว

    I love this man #NoHomo

  • @qahanis
    @qahanis 4 ปีที่แล้ว

    it helps me a lottt a lottt thank you!! i hope u will do a video on tangible non current assets eg depreciation and all that. thank you in advance :)

    • @AccountingStuff
      @AccountingStuff  4 ปีที่แล้ว

      Thanks, I plan to cover depreciation fairly soon

  • @blast2686
    @blast2686 4 ปีที่แล้ว +1

    Why is LIFO not allowed by the IFRS?

  • @ZuhalBeyza
    @ZuhalBeyza 4 ปีที่แล้ว

    The handsome accounting man ;)

    • @ZuhalBeyza
      @ZuhalBeyza 4 ปีที่แล้ว

      Not only handsome, but also funny and clever (:

  • @sadiqrisikat-hz6xq
    @sadiqrisikat-hz6xq 2 หลายเดือนก่อน

    Thank you

  • @nicolecarson9067
    @nicolecarson9067 2 ปีที่แล้ว

    Is lifo used in periodic or perpetual method or can it be used in both

  • @Talia778real
    @Talia778real 2 ปีที่แล้ว

    Got it,ty.😀

  • @narmeenomer5313
    @narmeenomer5313 3 ปีที่แล้ว

    But what if we have more than three purchases ? Which should we choose

  •  5 ปีที่แล้ว +1

    Great💥

  • @lemmen7420
    @lemmen7420 4 ปีที่แล้ว

    Hey James Great video ! thank you i learned a lot

  • @alanmoskovic172
    @alanmoskovic172 2 ปีที่แล้ว

    LIFO as a valuation model is also not allowed under ASPE.

  • @mohibqureshi391
    @mohibqureshi391 3 ปีที่แล้ว +1

    In rising trends of prices, the LIFO method of cost flow assumption leads to higher cost of goods sold...WHY?

    • @mohibqureshi391
      @mohibqureshi391 3 ปีที่แล้ว +1

      Question 2: the lesser COGS yields mor gross profit and gross profit margin and eventually it result in HIGHER net income ...WHY?

  • @FrostedPoro
    @FrostedPoro 4 ปีที่แล้ว

    thank u

  • @shanoo2467
    @shanoo2467 5 ปีที่แล้ว

    PLZ UPLOAD THE AVCO VID MY EXAM IS TMRW!!!!

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว

      Hey! Unfortunately it won't be up until next week. Good luck! Hope you ace it

  • @rohinisakure4453
    @rohinisakure4453 5 ปีที่แล้ว +1

    Ledgend says its impossible to get heart😍 from JAMES
    BY THE WAY GOOD VIDEO AND YOU GOT A FRESH SUB YESTERDAY ONLY

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว +1

      Cheers Rohini, it's great to have you on board :)

  • @mujahidahmed8
    @mujahidahmed8 5 ปีที่แล้ว

    What is the difference between AVCo And weighted average cost

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว +1

      None at all, they are the same method

  • @AC_Blanco
    @AC_Blanco 5 ปีที่แล้ว +1

    Don't use LIFO if you're required to fill under IASB.

  • @katherinemartinez839
    @katherinemartinez839 3 ปีที่แล้ว

    how did he get 100 times 2 dollars per unit?

  • @meenanarasimman6367
    @meenanarasimman6367 4 ปีที่แล้ว +1

    Thala gethu thala

  • @helenayui7522
    @helenayui7522 4 ปีที่แล้ว

    Where did 2,750 revenue came from? I am confuse. Anyone help

    • @totallyadorkable3425
      @totallyadorkable3425 4 ปีที่แล้ว

      The $2,750 revenue came from the November 12th transaction of selling 500 squeegees.

  • @Swimming-3000
    @Swimming-3000 5 ปีที่แล้ว

    but... if this method is forbidden by the IFRS... why does some people uses it?

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว +1

      Because not everyone has to follow IFRS, and LIFO brings with it some potential tax advantages

  • @fardeenshamsab4254
    @fardeenshamsab4254 4 ปีที่แล้ว

    👍

  • @andrewchang1146
    @andrewchang1146 5 ปีที่แล้ว

    Dude you sound like the guy from the true crime podcast

    • @AccountingStuff
      @AccountingStuff  5 ปีที่แล้ว

      Haha, that's a first!

    • @andrewchang1146
      @andrewchang1146 5 ปีที่แล้ว

      Accounting Stuff open.spotify.com/episode/7i89EGSDPsuSj5TWCPI4EM?si=h1h2P-EVThODCzOxBKsTxw same person

  • @abdirisakabdimahadahmed1536
    @abdirisakabdimahadahmed1536 4 ปีที่แล้ว

    Sir your revenue is 2750 how it happen explain me thanks teacher

    • @AccountingStuff
      @AccountingStuff  4 ปีที่แล้ว +1

      Hey Tabinta, sure thing! You sold 500 units for $5.50 each. 500 x $5.50 = $2,750

    • @abdirisakabdimahadahmed1536
      @abdirisakabdimahadahmed1536 4 ปีที่แล้ว

      @@AccountingStuff i understood thanks sir

    • @abdirisakabdimahadahmed1536
      @abdirisakabdimahadahmed1536 4 ปีที่แล้ว

      @@AccountingStuff and my exam went well 💪💪 you are the best teacher 💪💪❤❤ love from somalia🇸🇴🇸🇴

    • @AccountingStuff
      @AccountingStuff  4 ปีที่แล้ว

      @@abdirisakabdimahadahmed1536 Nice one, glad to hear it went well!!

  • @Heresheis0818
    @Heresheis0818 ปีที่แล้ว

    8:36

  • @Youtube_ban_me
    @Youtube_ban_me 3 ปีที่แล้ว

    Em I the only one who dont like brit accents when watching informative youtube vids? shit makes me mad lol

  • @tradways
    @tradways ปีที่แล้ว

    you're having too much fun saying it... squidgeez

  • @salis5941
    @salis5941 3 ปีที่แล้ว

    So hard

  • @anhlenguyen404
    @anhlenguyen404 ปีที่แล้ว

    thank youu