{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Chapter 8 - Chapter 8 Valuation of Inventories Inventory...

Info icon This preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 8 Valuation of Inventories Inventory Overview Defined - asset items held for sale in the ordinary course of business, or goods to be used in the production of goods to be sold o Merchandise Inventory o Manufacturing Inventory Inventory systems - used for planning and control o Perpetual inventory system - keeps up-to-date records of inventory and cost of goods sold Purchases, returns and freight charges are recorded in Inventory Inventory is updated and COGS calculated for every sale o Periodic inventory system - inventory is counted periodically and COGS is calculated Relies on purchases, returns, and freight in accounts Inventory account is updated only after a physical count o Physical inventory counts are necessary under both perpetual and periodic systems Physical Goods Included in Inventory Goods in transit - goods are included in inventory when title passes
Image of page 1

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

View Full Document Right Arrow Icon
o FOB shipping point - title passes when the vendor delivers the goods to the shipper (buyer includes in inventory when shipped) o FOB destination - title passes when the goods reach their destination (buyer includes in inventory when goods are received) Consigned goods - belong to the consignor (even if physically located at the consignee's business) Special sale agreements - may affect the inclusion of goods in inventory o
Image of page 2
Image of page 3
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