3.26 - Today's Topic Financial Accounting Information...

Info icon This preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Today’s Topic PLEASE TURN OFF CELL PHONES Financial Accounting Information System This class will describe GAAP for: Balance Sheet: Inventory Income Statement: Cost of Goods Sold, Period Expenses Statement of Cash Flow effect
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Fig 176 Inventory Cost Flow Method Inventory cost flow methods pertain to the flow of costs through the accounting records, not the actual physical flow of goods. Physical flow of goods determines the number and type of items in the inventory. Cost flows are used to allocate costs between the inventory account and cost of goods sold.
Image of page 2
Fig 177 Inventory Cost Flow Methods Four  Common  Inventory  Cost Flow  Methods Specific  Identification First-in, First-  out (FIFO) Last-in, First- Out (LIFO) Weighted  Average
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Fig 178 Specific Identification When a company’s  inventory consists of  many high-priced,             low-turnover goods  the record keeping  necessary to use  specific identification  is more practical.
Image of page 4
Fig 179 Specific Identification Assume Baker Company  purchased two identical  inventory items: the first for  $100 and the second for $110.  Using specific identification,  when the first item is sold, cost  of goods sold would be  $100.  When the second item is  sold, cost of goods sold would  be $ 110. 
Image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Fig 180 First-in, First-out The first-in, first-out  cost flow method  requires that the cost  of the items purchased  first be assigned to  Cost of Goods Sold.
Image of page 6
Fig 181 First-in, First-out Assume Baker Company  purchased two identical  inventory items: the first for  $100 and the second for $110.  Using first-in, first-out, the cost  assigned to the first item sold  would be $100(the first cost in).  The cost of goods sold assigned  to the second item sold would  be $110.
Image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern