How Inventory Method Affects Financial Statements

The video tutorial discusses the impact of four inventory valuation methods—specific identification, FIFO, LIFO, and weighted average—on financial statements during inflationary and deflationary periods. Specific identification is precise, while FIFO results in lower COGS and higher profits during inflation. Conversely, LIFO leads to higher COGS and lower profits. Weighted average yields results between FIFO and LIFO. The tutorial emphasizes understanding these methods' effects on financial statements to make informed choices.

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