Notes Chapter 6

Notes Chapter 6 - Notes Chapter 6 I. Classifying Inventory...

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Notes Chapter 6 I. Classifying Inventory a. Merchandising- inventory consists of many different items (grocery store = meat, dairy products, canned goods, produce) a.i. Items are owned by the company a.ii. Items are in a form ready for sale in ordinary course of business b. Manufacturing- three inventory categories: b.i. Finished goods (completed and ready for sale) b.ii. Work in process (in production cycle but not yet complete) b.iii. Raw materials (goods that will be used in production) c. Just-in-time inventory (JIT) methods = companies manufacture or purchase goods just in time for use II. Determining Inventory Quantities a. Perpetual inventory systems take a physical inventory to 1) check accuracy of records and2) determine amount of inventory lost due to wasted materials, shoplifting, etc. b. Periodic inventory systems take a physical inventory to 1) determine inventory on hand at the balance sheet date and 2) determine cost of goods sold for the period c. Ownership of goods: c.i. Goods in Transit—purchased goods not yet received, sold goods not delivered c.i.1.
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This note was uploaded on 11/21/2011 for the course BUS 214 taught by Professor Waker during the Winter '08 term at Cal Poly.

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Notes Chapter 6 - Notes Chapter 6 I. Classifying Inventory...

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