This module covers inventory cost flow methods under a periodic inventory system. Students determine the value of the ending inventory and cost of goods. The four methods include: specific identification, weighted average cost, first-in first-out (FIFO), and last-in first-out (LIFO). In addition, the tutorial compares and contrasts how applying the different costing methods affect the balance sheet and income statement.
Type of Material:
Drill and practice
This worksheet could be used in class or outside of class as homework or for review.
Identify Major Learning Goals:
Understand, apply, compute, compare and contrast the results of calculating ending inventory and cost of goods sold using each of four inventory costing methods.
Target Student Population:
High school, introductory financial accounting
Prerequisite Knowledge or Skills:
Knowledge of introductory accounting terminology and a basic understanding of the accounting equation, the accounting principles of matching and inventory costing, and the nature of the balance sheet and income statement are necessary.
The worksheet and instructor's solution are accurate, including an adequate amount of material to reinforce concepts previously covered in class. The worksheet summarizes the material well and does a good job in covering a focused amount of content.
The module could be made richer if the questions related to the impact both on the balance sheet and on the income statement with the given condition. All three of the questions should require students to explain their answers.
Potential Effectiveness as a Teaching Tool
Provides good practice for students in applying and comparing four methods of calculating ending inventory and cost of goods sold values. Learning goals, context for use (including implementation options), teaching notes, are provided along with the actual downloadable teaching materials (worksheet and instructor's solution).
Could have provided more context for the use of the material, i.e. having covered the basic accounting equation, the accounting principles of matching and inventory costing and the basic financial statements.
Ease of Use for Both Students and Faculty
Very easy to use, with very clear instructions. The web page that describes the activity is nicely designed.
The worksheet is not designed for online learning. Depending upon how the activity is implemented, the exercise may lack interactivity and engagement, particularly in the online environment. Instructors who wish to use the activity for online learning would need to implement the activity as a formative assessment using the quiz/test features of a Learning Management System. This process might be time consuming. The module is generally not visually appealing.
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