How to calculate and record a FIFO adjustment in inventory accounting when your company uses standard costing.

As discussed in the previous video on FIFO (which I would encourage you to watch first at https://www.youtube.com/watch?v=RAj94EUmm6g ), the acronym FIFO stands for First In First Out. FIFO is an accounting fiction in cost accounting that is a major determinant of Cost Of Goods Sold and Gross Profit.

We will use the exact same numbers in terms of the amount of product bought and sold as in the previous video, but the value in $ will differ during the quarter.

Related videos:
FIFO inventory accounting
https://www.youtube.com/watch?v=RAj94EUmm6g&index=1&list=PLKbmcnUUQMll_T7-NtXgzMv4h7Q1CRh_s
LIFO inventory accounting
https://www.youtube.com/watch?v=Tq4oZA_npWM&index=3&list=PLKbmcnUUQMll_T7-NtXgzMv4h7Q1CRh_s
FIFO vs LIFO example
https://www.youtube.com/watch?v=VickgxlajOM&index=4&list=PLKbmcnUUQMll_T7-NtXgzMv4h7Q1CRh_s

Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business and #accounting vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investing decisions. Philip delivers #financetraining in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!