inventory

inventory

1. tangible assets

2. classification

   • trading entities (retailers)
     • to be sold
   • manufacturing entities (producers)
     • consumed, working ,finished

3. initial measurment

   • all costs incurred and ready
   • manufacturing, all+labors, overhead, work,finishing

4. inv, accounting systems

   • perpetual
     • updates immediately
     • expensive,heterogenous
     • continuos monitoring
     • advantage
       • inventory, cost of, at any
     • disadvantage
       • bookkeeping,complex,time
   • periodic
     • updated at a specific interval, physical count
     • inexpensive, homogenous
     • advantage bookkeeping,simpler
     • a disadvantage, no continuous monitoring

5. goods in transit

   • for the physical count, eliminate that are not
   • are not, are not on way
   • whose legal title
     • fob shipping point
     • fob destination

6. goods out on consignment

   • is an arrangement, not sold, possible sold
   • included in consignor`s inventory,consingee never, consigned

7. estimation

   • when
     • exact stock count , not feasable
     • have been distroyed
     • the gross profit method used

8. inventory earrors

   • have a material affect on current,woeking,cost of,equity
   • reverse to subsequent period
   • purchases
     • not recorded and ending
       • cost of, gross, net, unaffected
       • current assets, liabilities understated
     • excluded from ending
       • cogs overstated
       • ending, gross,net,retained,current,understated
     • ending,icreasing
       • cogs,understated
       • ending, gross,net,retained,current,overstated