3-15b - Unit IV The Retail Method of Inventory Part II...

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Unit IV The Retail Method of Inventory
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Part II General Procedures for Implementing the Retail Method of Inventory
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Part II. General Procedures for Implementing the Retail Method of Inventory A. FINDING AN OPENING BOOK INVENTORY FIGURE When the “retail method” is first installed, a complete physical inventory of all products must be done The retail value of the goods counted is used as the opening book inventory This is the same figure as the closing physical stock figure of the previous accounting period or the original physical inventory if it is the first accounting period ever The closing physical inventory is the same as the opening book inventory for the new accounting period
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Part II. General Procedures for Implementing the Retail Method of Inventory B. MAINTAINING A PERPETUAL BOOK INVENTORY FIGURE Between physical inventories transactions occur that impact inventories they include: Goods sold to customers Merchandise is purchased and received from resources Customers return merchandise Merchandise is marked down Goods are transferred to other departments in the same store for resale Merchandise is transferred to other stores Merchandise is returned to vendors occasionally
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Part II. General Procedures for Implementing the Retail Method of Inventory Because there are so many transaction types the retailer will keep a book inventory or a record of what should be in the store This is also sometimes referred to as the perpetual or running book inventory
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Part II. General Procedures for
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This note was uploaded on 02/14/2012 for the course HUEC 3043 taught by Professor Freeman during the Fall '10 term at LSU.

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3-15b - Unit IV The Retail Method of Inventory Part II...

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