 Okay, so let's think about these methods in a bit more detail. Easiest to most complex. The easiest system is a cash-based system, in which case when purchasing inventory, possibly with the help and use of bank feeds. In other words, you'll have the bank feeds turned on. When you buy inventory, there's gonna be a decrease in the checking account, which you will see in the bank feeds. When you add that to the books, instead of recording an increase in an asset account of inventory, you will just expense it in the form of cost of goods sold. Now, the problem with this method is that it's not tracking inventory the way we're supposed to track it. And it usually is supposed to be using an accrual component, an accrual concept to it. In other words, we're supposed to put it on the books as an asset when we purchase it and not expense it in the form of cost of goods sold until we actually sell the inventory. And that generally happens when we actually basically ship the inventory. That's the general concept when the inventory goes out. So for example, if you were using QuickBooks, the triggering event in a perpetual inventory system will be when we create the invoice or the sales receipt. That's when QuickBooks, if using a perpetual inventory system will generally decrease inventory and record the cost of goods sold. However, normally for most of the methods we look at, we're not gonna be using a perpetual inventory system. So we're gonna have to come up with some other way to do this. The easiest way would be to have a cash-based system, although you're gonna have that timing problem. That timing problem may also be a problem for taxes, if nothing else, because for taxes, even if you're a sole proprietorship, you usually have to do a cost of goods sold calculation, which means you're gonna need to know ending inventory and then possibly you can back into the cost of goods sold calculation with that. You might be able to do a workaround for taxes. In other words, once a year, you might be able to back into your cost of goods sold calculation by counting the units of inventory you have at the end of the year, looking at the current price of the inventory at that point in time and use that as your ending inventory number and then back into basically the cost of goods sold calculation. So that would be the easiest thing to do. It might get you by for your taxes. However, it's still gonna be somewhat limited on the detail. So let's take a look at the pros and cons in a bit more detail of the simplest method. The pros, it's easy, that's the point. There's no need for third-party integrations to track inventory. So obviously the more kind of integrations that we have, the more complex our system. So it's nice to keep it easy if we can. The only thing we would be using here is the bank feeds that most people are feeling pretty comfortable with at this point in time. On the cons side of things, we do not have as detailed information for decision-making. So in other words, we're not actually tracking the inventory as we go. If we were using a periodic inventory system, we would possibly do that at the end of each month. So we might have the information more relevant for decision-making, for actually purchasing of the inventory and taking a look at our profit margins for internal decision-making. Here, we're making the adjustment at the end of the year for ending inventory primarily for taxes. The point of the accrual method system isn't simply for tax preparation. The point of the accrual method system is best practices for internal decision-making purposes. We still need to make adjusting entries at least once a year to properly calculate ending inventory and the related cost of goods sold for income taxes. In other words, we're gonna be doing the easy thing. We're just expensing. We're not even dealing with the asset account of inventory or the accrual concepts. However, at least once a year, the tax code may force us to deal with the accrual concept. So we're still gonna have to deal with valuing the inventory, counting the inventory, dealing with not just the units of inventory, but also the dollar amount of inventory. So we might talk about methods to do that in future presentations as we dive into the cash-based method.