iNventories ntermediate Accounting Accounting School. Zhongnan
7 Inventories Accounting School ·Zhongnan University of Economics & Law ntermediate Accounting I 中级会计学
1. Classifications of inventory Inventories are the assets of a company which are held for sale in the ordinary course of business in the process of production for sale, or held for use in the production of goods or services to be made available for sale
1. Classifications of inventory Intermediate Accounting 7 Inventories Inventories are the assets of a company which are : ➢ held for sale in the ordinary course of business, ➢ in the process of production for sale, or ➢ held for use in the production of goods or services to be made available for sale
Inventory Types Income Balance sheet items Statement Items Cost of Retailer Merchandise Sale Goods Sold Manufacturer Raw Work in Finished Cost of Materials Process G Goods sold Direct Overhead Sale Labor
Merchandise Balance Sheet Items Income Statement Items Retailer Cost of Sale Goods Sold Manufacturer Raw Materials Cost of Goods Sold Sale Finished Goods Work in Process Direct Overhead Labor Intermediate Accounting 7 Inventories Inventory Types
2. Alternative inventory systems a company using the periodic inventory system does not maintain a continuous record of the physical quantities(or costs) of inventory on hand a perpetual inventory system provides for a continuous record of physical quantities in the inventory. A company using a perpetual system maintains a continuous record of the physical quantities in its inventory
2. Alternative inventory systems Intermediate Accounting 7 Inventories A perpetual inventory system provides for a continuous record of physical quantities in the inventory. A company using a perpetual system maintains a continuous record of the physical quantities in its inventory. A company using the periodic inventory system does not maintain a continuous record of the physical quantities (or costs) of inventory on hand
Intermediate Accounting 7 Inventories Periodic Inventory Systems Cost of Goods Sold is determined and Inventory is adjusted to proper balance at period end All purchases of inventoriable merchandise are recorded in the purchases account Ending inventory is determined by physical count of merchandise on hand
Periodic Inventory Systems Intermediate Accounting 7 Inventories ➢ Cost of Goods Sold is determined and Inventory is adjusted to proper balance at period end. ➢ All purchases of inventoriable merchandise are recorded in the Purchases account. ➢ Ending inventory is determined by physical count of merchandise on hand