Chapter_6_Student-Acct_2000 (3)

Chapter_6_Student-Acct_2000 (3) - CHAPTER 6 Inventories...

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Chapter 6-1 CHAPTER 6 Inventories Financial Accounting, Sixth Edition
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Chapter 6-2 Classifying Inventory One Classification: Merchandise Inventory Three Classifications: Raw Materials Work in Process Finished Goods Merchandising Company Manufacturing Company Regardless of the classification, companies report all inventories under Current Assets on the balance sheet.
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Chapter 6-3 Physical Inventory taken for two reasons: Perpetual System 1. Check accuracy of inventory records. 2. Determine amount of inventory lost (wasted raw materials, shoplifting, or employee theft). Periodic System 1. Determine the inventory on hand 2. Determine the cost of goods sold for the period. Determining Inventory Quantities SO 1 Describe the steps in determining inventory quantities.
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Chapter 6-4 Involves counting, weighing, or measuring each kind of inventory on hand. Taken, when the business is closed or when business is slow. at end of the accounting period. Taking a Physical Inventory Determining Inventory Quantities SO 1 Describe the steps in determining inventory quantities.
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Chapter 6-5 Goods in Transit Purchased goods not yet received. Sold goods not yet delivered. Determining Ownership of Goods Determining Inventory Quantities SO 1 Describe the steps in determining inventory quantities. Goods in transit should be included in the inventory of the company that has legal title to the goods. Legal title is determined by the terms of sale .
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Chapter 6-6 Determining Inventory Quantities SO 1 Describe the steps in determining inventory quantities. Illustration 6-1 Ownership of the goods passes to the buyer when the public carrier accepts the goods from the seller. Ownership of the goods remains with the seller until the goods reach the buyer. Terms of Sale
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6-7 Consigned Goods Goods held for sale by one party although ownership of the goods is retained by another party. Determining Ownership of Goods
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This note was uploaded on 05/07/2011 for the course ACCT 2000 taught by Professor Holmes during the Spring '08 term at LSU.

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Chapter_6_Student-Acct_2000 (3) - CHAPTER 6 Inventories...

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