LIFO and FIFO Inventory Methods

This video tutorial explains how to calculate gross profits using the LIFO and FIFO methods. It begins with a scenario where a business purchases and sells stock, then demonstrates how to calculate total sales. The video provides step-by-step instructions for calculating gross profit using both LIFO and FIFO methods, highlighting the differences in closing stock and resulting gross profit. The tutorial concludes by explaining why LIFO is not allowed in Australia due to its impact on taxes.

What are the two methods discussed in the video for calculating gross profits?

• FIFO and FOFI

• LIFO and FIFO

• LIFO and LILO

• FIFO and FILO

On which date did the business purchase 100 stock at $10?

• January 4th

• January 3rd

• January 2nd

• January 1st

How much sales revenue was generated from selling 150 stock at $20 each?

• $4,000

• $3,500

• $3,000

• $2,500

What does LIFO stand for?

• Last In, First Out

• First In, Last Out

• Last In, Last Out

• First In, First Out

In the LIFO method, what is the closing stock value?

• $2,000

• $1,000

• $1,500

• $500

What is the gross profit calculated using the LIFO method?

• $1,000

• $2,000

• $1,250

• $1,500

What does FIFO stand for?

• Last In, First Out

• First In, First Out

• Last In, Last Out

• First In, Last Out

In the FIFO method, what is the closing stock value?

• $750

• $500

• $1,250

• $1,000

What is the gross profit calculated using the FIFO method?

• $2,000

• $1,000

• $1,250

• $1,500

Which method results in a higher gross profit in this scenario?

• LIFO

• FIFO

• Both are equal

• Neither