COMMERCE 1AA3 Chapter 6: Chapter 6.docx
9 Apr 2015
School
Department
Course
Professor
Document Summary
Chapter 6: inventory and cost of goods sold. It allows the user to distinguish between similarities and differences by comparing a company"s financial statement from one period to the next. A business must use the same accounting methods. Cost of goods sold and procedures from period to period. Cost of the inventory the business has sold to customers. Formulas that brings together all the inventory data. Cost-of-goods-sold for the entire accounting period: beginning model. Gross profit method inventory + purchases = goods available for sale. Then, goods available for sale ending inventory. A business financial statement must report enough information for outsiders to make knowledgeable decisions about the business. The company should report relevant, reliable, and comparable information about its economic affairs. Inventory costing method by which the first costs into inventory are the first costs out to cost of goods sold. Ending inventory is based on the costs of the most recent purchases.
