PHYSICAL METHODS

1. All purchases of inventory during the accounting period are recorded by debiting the account of purchase 
2. Total purchases account at the end of the accounting period will be added to the cost of inventory in hand at the beginning of the period to determine the total cost of which is available for sale during the period
3. Total cost of goods available for sale minus the ending inventory to determine the cost of goods sold
4. Cost of goods sold is a residual amount that depends on the final results of the physical inventory count