Practical inventory problems require identifying the method to apply, organizing inventory data, and performing systematic calculations. First, determine opening inventory, purchases during period, sales/usage, and closing physical inventory from given information. For FIFO method: List purchases chronologically, allocate oldest costs to COGS, ending inventory uses latest costs. For LIFO method: Allocate latest purchase costs to COGS, ending inventory uses oldest costs plus opening inventory. For weighted average: Calculate price per unit, multiply by quantities. Handle part-period purchases carefully by dating transactions accurately. When closing inventory values are given, verify COGS calculations or solve for missing values. Account for goods in transit (FOB shipping point vs FOB destination), goods on consignment, returns, and damaged goods. Prepare detailed schedules showing opening inventory, purchases, COGS, and closing inventory. Account for obsolescence allowance reductions if mentioned. Verify total costs using: Opening Inventory + Purchases - Closing Inventory = COGS. Journal entries: Debit Cost of Goods Sold/Profit & Loss, Credit Closing Inventory with the amount. Opening inventory is already expensed in prior period. Handle multiple inventory valuation layers if LIFO pooling is involved. Show all workings clearly; state assumptions made. Problems often test understanding of matching principle and impact on profits. Exam tip: Always prepare detailed working schedules; verify calculations using the fundamental inventory formula; show clear step-by-step working for examiner review.