Compute the inventory valuation and cost of goods sold using fifo costing method

The manual inventory valuation method suggest that the valuation of an inventory has to be manage manually in financial accounting. The periodic journal entry has to be passed on regular internal so keep updated the valuation in balance sheet and cost of goods sold in profit and loss account.

On every regular internal an accounting entry has to be passed as below:

Description Debit Credit
Inventory Valuation   800
Cost of Goods Sold 800  

To compute the cost of goods sold use the below formula

COGS = Inventory Valuation as per Balance sheet - Inventory Valuation as per Inventory

Product Cost price

The cost price on the product page always display the cost of last unit sold or consumed or scrapped from the stock. If you change that manually it will not make any changes in the system.


Hide the product cost field, if all of your products have FIFO as the inventory costing method, even-users will never get confused.


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