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In this video you'll learn how the FIFO (first in, first out) inventory cost assumption works. The FIFO method assumes that the oldest products in a company’s inventory have been sold first. We'll practice using an example to illustrate how FIFO is used to calculate cost of good sold (COGS) and ending inventory. We'll also compare FIFO with the LIFO method so we can understand the difference between these calculations.

00:00 The FIFO Inventory Method
01:34 Why Inventory Cost Assumptions Are Used
02:39 The FIFO Inventory Principle Explained
03:02 Accounting With FIFO - An Example
04:21 Comparison With LIFO Inventory Method
05:08 Advantages of FIFO
06:09 Calculating Closing Inventory with FIFO
07:28 Wrap Up

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#accounting #fifo #CostAccounting