COMM 293 Lecture Notes - Lecture 8: Perpetual Inventory, Inventory Turnover, Cash Flow
Document Summary
Nature of inventory and cost of goods sold. A: costs included in inventory purchases, flow of inventory costs, nature of cost of goods sold. Control of invientory: internal control of inventory, perpetual and periodic inventory systems, perpetual inventory records in practice, errors in measuring ending inventory. Inventory costing methods: specific identification method, cost flow assumptions, financial statement effects of inventory costing methods, consistency in use of inventory costing methods, managers" choice of inventory costing methods. Iv valuation at lower of cost or market. Evaluating inventory management: measuring efficiency in inventory management. Chapter supplements: additional issues in measuring purchases, last-in, first-out method (lifo) Apply the cost principle to identify the amounts that should be included in inventory and determine the cost of goods sold for typical retailers, wholesalers, and manufacturers. Compare methods for keeping track of inventory, and analyze the effects of inventory errors on financial statements. Report inventory and cost of goods sold using three inventory costing methods.
