Peer Review

Perpetual Inventory Valuation Method: LIFO

Material Detail page

Reviewed:: May 3, 2021 by Business

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Ratings

Overall Rating:

Content Quality:

Effectiveness:

Ease of Use:

Overview:

This video is a tutorial about how to compute ending inventory using the LIFO method of inventory valuation. It contains an explanation of how the LIFO method is applied to different inventory costs and how that affects the ending inventory valuation. The video contains a comparison of LIFO and FIFO inventory valuations methods to highlight the differences between the ending inventory valuations. An explanation of how the ending inventory valuation is determined during periods of rising prices assist in the understanding of the differences between the two methods. This is a good example to be shared with beginning accounting students.

Type of Material:

Tutorial

Recommended Uses:

In class
Homework
Review
Individual
Team

Technical Requirements:

Requires internet browser to access video on YouTube (under the creator’s YT channel called the Bean Counter).

Used Google Chrome, 64-bit, Version 89.0.4389.90 to access and download.

Identify Major Learning Goals:

Recognize how the concept of last-in, first-out (LIFO) method of inventory valuation is calculated.
Explain how LIFO differs from the first-in, first-out (FIFO) method and which other accounting values such as cost of goods sold (COGS) are impacted by the selection of a LIFO versus FIFO method.
Explain the differences in ending inventory valuation during periods of rising prices using the LIFO and FIFO methods.

Target Student Population:

Financial Accounting
College lower division

Prerequisite Knowledge or Skills:

Basic Financial Accounting
Merchandise accounting

Content Quality

Rating:

Strengths:

This is a good demonstration of computing LIFO and demonstrates the concepts of using amounts from different inventories well.
Video is concise so helps prevent student attention from wandering.
Video stays on one view of data which allows students enough time to review the information while the narrator is speaking.
YouTube format enables closed-captioning, speed controls, and other user settings.
The amount of material presented is adequate to explain it thoroughly and concise enough to retain the user’s interest.

Concerns:

Video is not self-contained in that it assumes existing knowledge of the accounting concepts of inventory, product costs, and cost of goods sold.
Additionally, it does not mention that the viewer should understand those concepts before using them to help explain LIFO.

Potential Effectiveness as a Teaching Tool

Rating:

Strengths:

The narrator does not go off-topic, and the short video length has a potentially positive effect on student attention.
Could be used as a quick review prior to exams or as a reinforcement of the concepts as covered in-class sessions, readings, etc.
It contains summary information about ending inventory valuations in periods of changing prices.

Concerns:

The video states the accounting concept, LIFO, that will be covered and that it will be compared to FIFO but does not provide background or definitions for other terms and concepts.
Additionally, it does not discuss the types of businesses that would be concerned with choosing between these two inventory methods.
Finally, the video does not discuss that there are other methods like weighted average.
The current video format does not provide any hands-on practice opportunities nor questions to check student comprehension.

Ease of Use for Both Students and Faculty

Rating:

Strengths:

The video has closed-captioning, and the relatively static view of an inventory valuation calculation enables students to fully review the information.
The video was easy to play from the posted YouTube channel and did not require viewing of ads prior to start.
It is very clear and easy to follow the directions and is accessible.

Concerns:

Although the relatively static view of an inventory valuation calculation enables students to fully review the information, it is also visually un-interesting (nothing draws the viewer’s attention).
The text shown on screen is difficult to read (slightly fuzzy in appearance which is worse when increased in size).
It would have been better if the spreadsheet used was easier to read.
The video is moderately interactive, but not designed for user input.

Other Issues and Comments:: Link is broken as of 4-1-2021 (reported using on-screen link and provided the corrected video location).
Creative Commons: