There's no way I could ever thank you enough for making learning as fun as you did in this video. You have returned the excitement to understand concepts back to me and I am incredibly grateful to you.
You're a gift from God! I have the worst Accounting teacher because he treats us very badly and with lots of attitude. Your videos are such a relief and encourages me to keep pushing. [ :
I’ve looked at multiple videos on LIFO, FIFO and weighted average and I have to say this was the one which was explained perfectly and I fully understand it now. Thank you for the videos man.
Tony I owe you my life I hated financial accounting this whole semester and you make it almost fun for me, your videos are going to help me pass this class thank-you!!
I can't believe I am paying over 300K to my damn university, 62k per course and the teacher has the audacity to ask us to watch Mr.bell's videos. No shade to you, Tony. YOU ARE AWESOME! legit, you are singlehandedly saving my grades. Also I am curious about why you don't like Lifo.
Yea why are you paying that? I mean you chose where you go to school right? You're going to pay that much and come out making 50-60k lol what a terrible idea. Do you have Community college where you live? Maybe try that then switch to Uni?
im desperately trying to understand financial accounting through an asynchronous summer class and I swear I watch my professor's videos 3 times over and none of it makes any sense. I watch one of your videos and it is explained so simply. Thank you sir you are a lifesaver and a grade saver!
Those examples helped. I had to take an exam of Fifo/Lifo, Merchandise Inventory, Bank Recouncilation and Receiveables and got a 90 out of a 100 on the exam! Thanks!
for me I really think that the best two and easy methods are FIFO and Weighted average also these are really very common in usage of most of companies around the world
What if a car dealership sells cars and small items like t-shirts or key chains. Can they use 2 different methods based on the type of inventory sold? I assume they can, because they can categorize the inventory differently?
Tony, after selling one sock, and we buy more in the inventory. How do we calculate the cogs in the next sale? How the new price is calculated in journal entry?
Hey tony hope you're doing well. Without i would have failed my exam. I am very thankfull and i would really like to contribute for this channel. It might be a small amount for you but i really want to thank you.
Thanks so much Elie! No need to contribute - just viewing and occasionally liking the videos is plenty - that's very kind of you to offer! Good luck in the rest of your studies.
Hi, I have a question about calculating COGS. FIFO and LIFO seem too complicated for where I’m at and so the simplicity of WAC (weighted average cost) is very appealing. However, the inconsistent use of terminology in various articles / videos I’ve come across discussing WAC has me confused. Is a WAC calculation done for (A) each product in inventory or is it calculated using (B) the total cost of all products in inventory? For example, let’s say I have 500 different products in my inventory. Some products have an average cost of $1 per unit, and other products can average $20,000 per unit. If I were to calculate WAC using (B) the total cost of all products in inventory, then the average cost of one unit of inventory would be around $2,000. Now let’s say I sell a product for $2. My COGS for that sale would be $2,000??? "B" doesn’t seem right. What am I missing?
You have to do it for every single product individually - as you suggested, lumping everything together wouldn't work! This is an area where computerized/automated systems help a lot!! As you can imagine it's a lot to keep track of. You need to do it individually for FIFO/LIFO also, so inventories are a lot of work to account for.
Wouldnt both methods have the exact same outcome in the end? the only difference is the profit will be stated Lower with LIFO in the begining and higher afterwards however this is the opposite with FIFO
Great question! If I have the same type of inventory over many years, then I stop carrying it after 5 years. If you total up all the years profits, the answer will be the same whether FIFO or LIFO is used. And the ending inventory value will be the same (0 - I sold it all off). But the inventory value and profit will be different each year in between - so the starting point and end point are identical, but the middle years are different.
Maybe it depends on the product for example if the items are chips. Lifo maybe best as if the product stays on the shelf it will go bad. The last one with the last date needs to be sold first because if it was fifo there be too many stale chips that people would bring back.
I think lifo is bad because wouldn't you want the stuff that is begging to get old to leaves shelves first(fifo) rather than the last items stocked being the first to go (lifo)?
That's it - Inventory doesn't typically move in a LIFO way, so why track it in a LIFO way - it's simply a tax avoidance trick! Not reflective of reality.
Imagine in 1982 Home Depot purchases 10,000 one-inch nails. They never sell out completely, but re-order once they are below 5,000. Under LIFO we will still have nails with 1982 costs on the books because First-In is Still Here! I don't like the system because it simply doesn't reflect reality of how companies move their inventory.
@@Tony-Bell Yeah, I'd agree, the only thing I'd see is that in your case it refers more to market prices ... or imagine very specific products like wine or whiskey. It gonna keep your company value at a low level. In Germany it's allowed under certain rules, though in IFRS accounting it's forbidden.
You have saved all of us accounting students. Thank you SO much for your efforts Tony
Agreed.It’s incredible how they make this class so ridiculously difficult
There's no way I could ever thank you enough for making learning as fun as you did in this video. You have returned the excitement to understand concepts back to me and I am incredibly grateful to you.
You're a gift from God! I have the worst Accounting teacher because he treats us very badly and with lots of attitude. Your videos are such a relief and encourages me to keep pushing. [ :
Thanks!!
I was clueless days before my exam, before I watched your videos. Happy to say that I aced that exam, thank you for the fantastic videos.
I’ve looked at multiple videos on LIFO, FIFO and weighted average and I have to say this was the one which was explained perfectly and I fully understand it now. Thank you for the videos man.
Asalam Waalaiqum
Tony I owe you my life I hated financial accounting this whole semester and you make it almost fun for me, your videos are going to help me pass this class thank-you!!
I can't believe I am paying over 300K to my damn university, 62k per course and the teacher has the audacity to ask us to watch Mr.bell's videos. No shade to you, Tony. YOU ARE AWESOME! legit, you are singlehandedly saving my grades. Also I am curious about why you don't like Lifo.
Yea why are you paying that? I mean you chose where you go to school right? You're going to pay that much and come out making 50-60k lol what a terrible idea. Do you have Community college where you live? Maybe try that then switch to Uni?
im desperately trying to understand financial accounting through an asynchronous summer class and I swear I watch my professor's videos 3 times over and none of it makes any sense. I watch one of your videos and it is explained so simply. Thank you sir you are a lifesaver and a grade saver!
I am literally passing my exams because of you Prof! Thanks a bunch!! Love from HFX, NS
Those examples helped. I had to take an exam of Fifo/Lifo, Merchandise Inventory, Bank Recouncilation and Receiveables and got a 90 out of a 100 on the exam! Thanks!
Woohoo!!!! Congratulations!!! Well done :)
Your welcome thank you!!
you should do a video on LIFO. it would be very helpful for Americans
ik you would probably never see this but i love you. you saved my life every time, hope life goes easy on you always
You are amazing!! I have a final in 2 days and this course saved me lol Thank you
I'm taking ACC-105 at Reading Area Community College. This was very helpful. Thank you.
This is an AMAZING resource! So thankful that I found this video and channel. Thank you!
for me I really think that the best two and easy methods are FIFO and Weighted average also these are really very common in usage of most of companies around the world
JUST WOOW , whatever you explained i did understand. Thank you so much
Tony, you're such a exceptional 👏 😍
Thank you for making it simple to digest!
Could you do a video on LIFO and FIFO periodic?
Thanks Tony Bell. Useful one
What if a car dealership sells cars and small items like t-shirts or key chains. Can they use 2 different methods based on the type of inventory sold? I assume they can, because they can categorize the inventory differently?
Absolutely - and they should!
Tony, after selling one sock, and we buy more in the inventory. How do we calculate the cogs in the next sale? How the new price is calculated in journal entry?
Will these videos help for the financial accounting CLEP test??
YOU ARE MY HERO
Hey tony hope you're doing well. Without i would have failed my exam. I am very thankfull and i would really like to contribute for this channel. It might be a small amount for you but i really want to thank you.
Thanks so much Elie! No need to contribute - just viewing and occasionally liking the videos is plenty - that's very kind of you to offer! Good luck in the rest of your studies.
Hi sir
Among the four which one is profitabale?
Was wondering why this guy was so peppy and friendly. My mans isn't American, he's Canadian
Good day sir. If you credit inventory, wont you debit A/R?
Hi, I have a question about calculating COGS. FIFO and LIFO seem too complicated for where I’m at and so the simplicity of WAC (weighted average cost) is very appealing. However, the inconsistent use of terminology in various articles / videos I’ve come across discussing WAC has me confused. Is a WAC calculation done for (A) each product in inventory or is it calculated using (B) the total cost of all products in inventory?
For example, let’s say I have 500 different products in my inventory. Some products have an average cost of $1 per unit, and other products can average $20,000 per unit. If I were to calculate WAC using (B) the total cost of all products in inventory, then the average cost of one unit of inventory would be around $2,000. Now let’s say I sell a product for $2. My COGS for that sale would be $2,000???
"B" doesn’t seem right. What am I missing?
You have to do it for every single product individually - as you suggested, lumping everything together wouldn't work! This is an area where computerized/automated systems help a lot!! As you can imagine it's a lot to keep track of. You need to do it individually for FIFO/LIFO also, so inventories are a lot of work to account for.
@@Tony-Bell Thanks for clarifying, Tony. Much appreciated!
wonderful explanation
So well explained!!
Thank you for this video ❤
Wouldnt both methods have the exact same outcome in the end? the only difference is the profit will be stated Lower with LIFO in the begining and higher afterwards however this is the opposite with FIFO
Great question! If I have the same type of inventory over many years, then I stop carrying it after 5 years. If you total up all the years profits, the answer will be the same whether FIFO or LIFO is used. And the ending inventory value will be the same (0 - I sold it all off). But the inventory value and profit will be different each year in between - so the starting point and end point are identical, but the middle years are different.
Maybe it depends on the product for example if the items are chips. Lifo maybe best as if the product stays on the shelf it will go bad. The last one with the last date needs to be sold first because if it was fifo there be too many stale chips that people would bring back.
Maybe breads a better example it would get moldy if it was lifo
material is very clear, confused about the milk from the back method tho
I think lifo is bad because wouldn't you want the stuff that is begging to get old to leaves shelves first(fifo) rather than the last items stocked being the first to go (lifo)?
* beginning sorry
That's it - Inventory doesn't typically move in a LIFO way, so why track it in a LIFO way - it's simply a tax avoidance trick! Not reflective of reality.
@@Tony-Bell So it makes companies able to artificially increase their costs without actually spending more for tax purposes?
@@andrew.sandler That's it (as best as I can understand it anyway!)
why dont you like LIFO? super curious!
Thank you so much!
Not all heroes wears capes.
Thanks 😊👍
11:53, did you say "Account wait to see you in the next-" did you make a pun??? xD
Haha - not on purpose! I am a dad though, so puns sometimes slip out....
Yes LIFO is bit goofy. Even parents usually use FIFO method for their children marriage😂😂.
sifuna ukufunda wena ulokhu usineka
Tsym!!!
Wouldn't LIFO be better for a company because they get rid of their higher debts faster?
Imagine in 1982 Home Depot purchases 10,000 one-inch nails. They never sell out completely, but re-order once they are below 5,000. Under LIFO we will still have nails with 1982 costs on the books because First-In is Still Here! I don't like the system because it simply doesn't reflect reality of how companies move their inventory.
@@Tony-Bell Yeah, I'd agree, the only thing I'd see is that in your case it refers more to market prices ... or imagine very specific products like wine or whiskey. It gonna keep your company value at a low level. In Germany it's allowed under certain rules, though in IFRS accounting it's forbidden.
LIFO goofy for sure
why do you look like johnny sins
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