MGCR 211 Lecture Notes - Lecture 12: Perpetual Inventory, Consignee, Consignor
9 Feb 2018
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Chapter 6 - reporting and analyzing inventory (13/10/16) or inventory cost flow assumptions. Financial statement effects : inventory affects both balance sheet and income statement - ending inventory is a current asset and. Cogs is an expense: cogs also affects gross profit, affecting retained earnings in statement of changes in equity as well as she section in balance sheet. Made when recording purchase of inventory : if a purchase is recorded incorrectly, the inventory and accounts payable will be misstated, usually in relation to the timing of ownership of goods (fob) Payable is too early too late unaffected unaffected unaffected unaffected. Presentation & analysis of inventory: presentation of inventory is crucial because inventory is usually company"s largest current asset, and. Inventory turnover : the importance of having a balance between having too little inventory and too much inventory - 2 ratios to help a company manage its inventory levels -
