CHAPTER 6 know how FOB shipping point and FOB destination affect the inventory of the buyer and of the seller if the goods are in transit at the end of the year. Understand the difference between the FIFO, LIFO, and weighted average inventory methods. Know which financial statement (cost of goods sold on the income statement or ending inventory on the balance sheet) the oldest and the newest costs will appear on under FIFO and LIFO. Know how to compute Cost of Goods Sold and Ending Inventory values using FIFO, LIFO, and Weighted Average costing methods under the periodic system and FIFO and LIFO methods under the perpetual system. Understand that FIFO and LIFO are cost flow assumptions on paper and DO NOT have to match the actual physical movement of goods. Understand and be able to compute the effects that an error in ending inventory would have on the income statement and on the balance sheet. Understand and be able to compute the effects that an error in beginning inventory would have on the income statement and on the balance sheet. know which method gives the most and least net income in inflationary and deflationary periods. CHAPTER 6 know how FOB shipping point and FOB destination affect the inventory of the buyer and of the seller if the goods are in transit at the end of the year. Understand the difference between the FIFO, LIFO, and weighted average inventory methods. Know which financial statement (cost of goods sold on the income statement or ending inventory on the balance sheet) the oldest and the newest costs will appear on under FIFO and LIFO. Know how to compute Cost of Goods Sold and Ending Inventory values using FIFO, LIFO, and Weighted Average costing methods under the periodic system and FIFO and LIFO methods under the perpetual system. Understand that FIFO and LIFO are cost flow assumptions on paper and DO NOT have to match the actual physical movement of goods. Understand and be able to compute the effects that an error in ending inventory would have on the income statement and on the balance sheet. Understand and be able to compute the effects that an error in beginning inventory would have on the income statement and on the balance sheet. know which method gives the most and least net income in inflationary and deflationary periods