First in first out FIFO, last in first out LIFO, Average inventory methods are estimates about inventory cost flows, first in first out estimating that the first items of inventory purchased are the first sold, FIFO inventory assumption being most intuitive for most because is what most would imagen as the actual inventory flow being that we try and sell the first inventory items first but note that first in first out is just an assumption and does not mean that the actual flow matches the assumption. Last in last out assumes we sell last unit of inventory first, LIFO seeming unusual to most because we imagine that we would try to sell the first unit of inventory first not the last unit of inventory first but note that these are assumptions about inventory flow and not the actual inventory flow. The comparison of FIFO and LIFO are a good example of how estimates, related to inventory in this case, have an impact on the financial statement and net income. The average method of inventory, being an average will be in the middle of first in first out FIFO and last in last out LILO
Why Learn Accounting – Financial Accounting / Managerial Accounting
https://youtu.be/uaWDB1YdA1k?list=PL6…
101 Double Entry Accounting System Explained – Accounting Equation
https://youtu.be/66e9QbrkE4g?list=PL6…
101 Cash vs Accrual – Cash Method / Accrual method differenc
https://youtu.be/i2O0cexCrqc?list=PL6…
101 Revenue Recognition Principle
https://youtu.be/M_pauBGz5Jc?list=PL6…
Double Entry Accounting System Explained – Balance Sheet
https://youtu.be/kOItl8E3fNA?list=PL6…
101 Income Statement Introduction
https://youtu.be/1k11H8icQxc?list=PL6…
101 Accounting Objectives – Relevance Reliability Comparability
https://youtu.be/mO8tPzFmN8o?list=PL6…
101 Transaction Rules – Accounting Equation
https://youtu.be/0vy6W_WTO2I?list=PL6…
101 Transaction Throught Process / Steps – Accounting Equation
https://youtu.be/SlTo3EXDuqU?list=PL6…
101 Owner Deposits Cash Transaction Accounting Equation
https://youtu.be/lPZoImc88eU?list=PL6…
101 Work Completed for Cash Transaction Accounting Equation
https://youtu.be/ll5xIHVdrVs?list=PL6…
100.110 Pay Employee with Cash Transaction Accounting Equati
https://youtu.be/bSa3NuVpkwc?list=PL6…
200 Debits & Credits Normal Balance – Double Entry Accounting Sy
https://youtu.be/alSWKuWPlxU?list=PL6…
200 Debits & Credits – One Rule to Rule Them All
https://youtu.be/RL3BFjL1eyE?list=PL6…