ch08_inventory I - Chapter 8-1 Valuation of Inventories:...

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Unformatted text preview: Chapter 8-1 Valuation of Inventories: Valuation of Inventories: A Cost-Basis Approach A Cost-Basis Approach Chapter Chapter 8 8 ISV Intermediate Accounting 12th Edition Update Kieso, Weygandt, and Warfield Prepared by Coby Harmon, University of California, Santa Barbara Chapter 8-2 1. 1. Identify major classifications of inventory. Identify major classifications of inventory. 2. 2. Distinguish between perpetual and periodic inventory systems. Distinguish between perpetual and periodic inventory systems. 3. 3. Identify the effects of inventory errors on the financial statements. Identify the effects of inventory errors on the financial statements. 4. 4. Understand the items to include as inventory cost. Understand the items to include as inventory cost. 5. 5. Describe and compare the cost flow assumptions used to account Describe and compare the cost flow assumptions used to account for inventories. for inventories. 6. 6. Explain the significance and use of a LIFO reserve. Explain the significance and use of a LIFO reserve. 7. 7. Understand the effect of LIFO liquidations. Understand the effect of LIFO liquidations. 8. 8. Explain the dollar-value LIFO method. Explain the dollar-value LIFO method. 9. 9. Identify the major advantages and disadvantages of LIFO. Identify the major advantages and disadvantages of LIFO. 10. 10. Understand why companies select given inventory methods. Understand why companies select given inventory methods. Learning Objectives Learning Objectives Chapter 8-3 Inventory Classification and Control Physical Goods Included in Inventory Costs Included in Inventory Cost Flow Assumptions LIFO: Special Issues Classification Classification Control Control Basic Basic inventory inventory valuation valuation issues issues Basis for Selection Goods in Goods in transit transit Consigned Consigned goods goods Special sales Special sales agreements agreements Inventory Inventory errors errors Product costs Product costs Period costs Period costs Purchase Purchase discounts discounts Specific Specific identification identification Average cost Average cost FIFO FIFO LIFO LIFO LIFO reserve LIFO reserve LIFO LIFO liquidation liquidation Dollar-value Dollar-value LIFO LIFO Comparison of Comparison of LIFO LIFO approaches approaches Advantages of Advantages of LIFO LIFO Disadvantages Disadvantages of LIFO of LIFO Summary of Summary of inventory inventory valuation valuation methods methods Valuation of Inventories: Valuation of Inventories: Cost-basis Approach Cost-basis Approach Chapter 8-4 Inventories are: items held for sale, or goods to be used in the production of goods to be sold. Inventory Classification and Systems Inventory Classification and Systems LO 1 Identify major classifications of inventory....
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ch08_inventory I - Chapter 8-1 Valuation of Inventories:...

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