LIFO, FIFO, Weighted Avg, and avg cost?

Question

No matter how hard I try, I can't get a grasp on these concepts and I can't apply them when numbers and units are put with it! any tips or websites?

Answer 1

These are methods of moving inventory costs from the inventory cost to the cost of sales account.
If you sell two items from inventory you use the last cost you paid under lifo. Under fifo you would use the earliest cost still in your inventory. Under weighted average you would determine a unit cost for each item in the inventory and use the cost you come up with. Under average cost you simply add the number of costs still in the inventory divide by the number you have come up with and use the answer as your unit cost.
This is simplified, especially with lifo since that method can become rather complicated what with pools etc. I've never found a good accounting text that helps much, it is something that you have to work with to get it down