PROCESSING ACCOUNTING INFORMATION
If COGS increases, Gross Profit decreases
If COGS decreases, Gross Profit increases
Salvage Amount (or Value)
You buy an item and plan on selling it before it depreciates fully.
Purchase Cost - Salvage Amount = Total Price/Cost of Item
The total cost is what you record.
Cost Flow = Physical Flow
Specific options of a common product
Not popularly used .
There are a bunch of blue cars, but each blue car is different, has a different I.D. number/code. That
type of situation is what Specialization I.D. is used for.
According to Wikipedia:
Average Cost = Unit Cost =
# of Goods Produced
Easy to use
Less Subject to Manipulation
First In, First Out
An approximation of physical flow of goods
----> cost flow parallels physical flow
Less Subject to manipulation than Specialization I.D.
Last In, First Out
Goods on Consignment
Inventory that someone is selling on the behalf of someone else without taking ownership.