MGMT 20000 Lecture Notes - Lecture 13: Deferral, Current Asset, Income Statement

• School: Purdue University
• Department: Management
• Course: MGMT 20000
• Professor: Frank Kane

Document Summary

Trace the flow of inventory costs from manufacturing companies to merchandising companies. Inventory includes items a company intends for sale to customers. For a manufacturing business-includes items that are not yet finished products available for sale. Reported as a current asset in the balance sheet. Cost of goods sold is the cost of the inventory that is sold during the period. Reported as an expense in the income statement. Other descriptions used to report sales of inventory. Product costs are costs associated with goods for sale until the time period during which the products are sold, at which time the costs become expenses. Period costs are costs that are expensed during the time period during the time period in which they are incurred. Expenses are the consumption of assets for the purpose of generating revenue. Understand how costs of goods sold is reported in a multiple-step income statement. Relationship between cost of goods sold and ending inventory.