PHI 1101 Lecture 8: respond_document_print (13)

• School: University of Ottawa
• Department: Philosophy
• Course: PHI 1101
• Professor: Laura Byrne

Document Summary

Two steps: 1. take a physical inventory of goods on hand. All companies(using the perpetual or periodic inventory system) need to determine quantity of inventory at the end of each accounting period: 2. determine ownership of goods(e. g. goods in transmit, consigned goods) Goods in transit: should be included in the inventory of the company that has legal title to the goods on the date of count. 1. specific identification method: used when goods are not ordinarily interchangeable: tracks the actual physical flow of goods, report ending inventory at its actual cost, normally only used in a perpetual inventory system. 2. cost formula methods: assume a flow of costs that may no be the same as the actual flow of goods. Two methods under ifrs: fifo(first-in first-out): assumes that the earliest goods purchased are the first to be sold and recognized as cost of goods sold. Beginning inventory + purchases = cost of goods sold + ending inventory.