Inventory accounting, from stock to statements.
Learn how inventory is classified, valued, recorded, and reported, from FIFO and weighted average methods to cost of goods sold, stock registers, and reconciliation.
Course overview
Inventory is the stock a business holds for sale or for use in production. Its value directly affects cost of goods sold, profit, and the balance sheet. This course explains how stock is valued, recorded, controlled, and reported.
- Understand what inventory is and the main types, such as raw materials, work in progress, and finished goods
- Compare inventory valuation methods and how each affects profit and closing stock
- Apply the FIFO, LIFO, and weighted average cost methods to numerical examples
- Understand the difference between periodic and perpetual inventory systems
- Calculate cost of goods sold and closing stock
- Maintain inventory records and stock registers
- Reconcile physical stock with book records and explain differences
- See how inventory valuation affects financial statements, and solve practical problems
Inventory Accounting lessons
Follow the lessons in order, or search and filter to jump to a subject.
Introduction to Inventory Accounting
Learn what inventory is and why it matters in accounting.
Types of Inventory
Explore raw materials, work in progress, and finished goods.
Inventory Valuation Methods
Get an overview of the main ways to value stock.
FIFO and LIFO Method
Learn how first-in and last-in assumptions affect stock and profit.
Weighted Average Cost Method
Value inventory using the average cost of goods available.
Periodic vs Perpetual Inventory System
Compare the two ways of tracking stock and recording purchases.
Cost of Goods Sold
Calculate the cost of the goods sold during a period.
Closing Stock Calculation
Work out the value of unsold stock at the end of a period.
Inventory Records and Stock Register
Learn how stock movements are recorded and tracked.
Inventory Reconciliation
Match physical stock with book records and explain differences.
Inventory Valuation and Financial Statements
See how stock value affects profit, assets, and reports.
Practical Problems
Practise numerical problems on valuation, COGS, and stock.
Learn how stock is valued, then how it is reported.
The lessons begin with inventory basics, move through valuation methods and stock systems, then cover records, reconciliation, financial statements, and practice problems.