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Instructor checks if students can access their devices for exercises.
Reference to exercise three on page 243, with digital text aligning with hard copy.

Definition: Goods available for sale includes both leftover inventory from the previous period plus items purchased within the current period.
- Important Relationship: Available inventory can either be sold or held in stock.
- If sold, quantities are recorded in Cost of Goods Sold (COGS).
- If retained, it contributes to the Ending Inventory.
Understanding that knowing any two of the three elements (goods available for sale, cost of goods sold, ending inventory) allows calculation of the third.

Definition: This method tracks each individual item and its cost.
Characteristics:
- Not widely used; applicable in specific, high-value inventory situations (e.g., jewelry).
- Offers high accuracy through dollar-for-dollar tracking.
Practical Example: Given data is used to work through specific identification, showing exact sales and remaining inventory.
- Example Data: 140 units at $6, sold 125 units, with remaining 15 units priced at $6 each.

Definition: Maintains constant tracking of inventory levels.
Process: Items are scanned in upon receipt and scanned out upon sale, providing real-time inventory data.
Accuracy: Potentially high but depends on store practices (theft, misplacement).
Example: Supermarkets using scanners to update inventory continuously.

Definition: Inventory is tracked at the end of accounting periods rather than continuously.
Process: Requires a physical count to assess inventory levels, used primarily by smaller businesses.
Characteristics:
- Example scenario provided where a liquor store keeps manual records without integration between purchases and sales.
- Emphasis on the necessity of periodic physical counts to evaluate inventory.

Discussion of FIFO (First In, First Out), LIFO (Last In, First Out), and Weighted Average Cost methods.
Options are based on assumptions rather than exact movement of inventory items.
Weighted Average Cost:
- Considers all purchased items at different costs, recalculating each time a new purchase occurs.
- Calculation example provided for clarity.

First layer valued; sales deplete inventory starting with the oldest stock.
Example Calculation: Selling 80 units means 40 from the first inventory layer and 40 from the next.

Last inventory unit purchased is the first to be sold, impacting reporting and cash flow.
Example: If a company only buys and never sells heavily, earlier stock may become obsolete.

All purchases are averaged out; this method ensures consistent costs per unit regardless of purchase date.
Example: With different units purchased at varying costs, the average is recalculated with each buy to maintain accuracy.
Example Calculation: Using average cost to derive COGS and ending inventory values.

Dynamics of recording sales and inventory movement:
- Each sale involves two entries: recognizing revenue and moving inventory to COGS.
Importance of accuracy in journal entries for sales and purchases.

Recognition that perpetual provides more real-time data while periodic leads to backward evaluation.
Importance of understanding differences in execution for when to apply methods appropriately.

Gross profit is dependent on both sales revenues and COGS, which change according to the inventory costing method used.
Notable that while the impacts may not seem significant, the choice of method can fluctuate net income depending on market conditions (rising or declining prices).
Underlining the belief that tracking every item individually is economically infeasible and inconsistent within practice.

Ensuring completeness of both sold and remaining inventory in concluding exercise questions.
Encouragement for practice with presented exercises to become comfortable with the processes.

Anticipation of practice with specific inventory systems and emphasis on proper understanding for upcoming evaluations and applications of learned material.