Ch 6 - Chapter 6 REPORTING AND ANALYZING INVENTORY 1...

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1 Chapter 6 REPORTING AND  REPORTING AND  ANALYZING  ANALYZING  INVENTORY INVENTORY
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2 Inventory-Merchandiser Consists of many different  items Owned by the company In a form ready for sale to  customers One inventory classification:  Merchandise Inventory
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  3 Inventory - Manufacturing Finished goods inventory Work in process Raw materials
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  4 Finished Goods Inventory Manufactured items that are  complete and ready for sale.
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  5 Work in Process   Manufactured inventory that has  been placed into production but  is not yet complete.
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  6 Raw Materials The basic goods that will be  used in production, but have not  been placed in production.
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  7 Determine Inventory  Quantities Determine inventory quantities by  counting, weighting  or  measuring  each type of inventory. Determine ownership of goods,  including  goods in transit,  consigned goods. 11 1
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  8 Questions Concerning  Ownership Do all the goods included in the  count belong to the company? Does the company own any goods  not included in the count? 
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  9 Goods in Transit These are goods on board a truck, train,  ship, or plane at the end of the period. 36   Who includes these in inventory? Buyer? Seller?   The  Company  with Legal  Title
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Terms of Sale- FOB (free-on-board)
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  11 Consigned Goods Goods of others you hold.  You do not pay      the goods until they sell.     The company does not take ownership.
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Inventory Costing - Periodic 1. Determine quantity of units of  inventory  2. Apply unit costs to the quantities 3. Determine total cost of inventory 4. Determine cost of goods sold Process can be complicated if units are  purchased at different times and at  different prices! 11
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Ch 6 - Chapter 6 REPORTING AND ANALYZING INVENTORY 1...

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