ACCT207 Lecture Notes - Lecture 6: Shoplifting, Current Asset, Financial Statement

• School: University of Delaware
• Department: Accounting
• Course: ACCT207
• Professor: Somerville Scott

Document Summary

Discuss how to classify and determine inventory. Perpetual system checks accuracy of inventory records and determines amount of inventory lost due to wasted raw materials, shoplifting, or employee theft. Periodic system determines the inventory on hand and the cost of goods sold for the period. Involves counting, weighing, or measuring each kind of inventory on hand. Taken when business is closed, slow, and at the end of accounting period. Goods in transit (should be included in inventory of the company that has legal title to the goods) Purchases goods not yet received and sold goods not yet delivered. Fob shipping point (buyer pays freight costs) Ownership of goods passes to the buyer when the public carrier accepts the goods from the seller. Ownership of the goods remains with the seller until the goods reach the buyer. To hold the goods of other parties and try to sell the goods for a fee, but without taking ownership.