ARBUS102 Chapter Notes - Chapter 7: Weighted Arithmetic Mean, Income Statement, Financial Statement
24 Feb 2016
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Chapter 7 reporting and interpreting inventories and cost of goods sold. Tricky to manage because as one of them changes (ex. quality) so do the others. Comes down to purchasing goods that can be sold soon after they are acquired. Inventory means goods that are held for sale in the normal course of business or are used to produce other goods for sale. Merchandise inventory, consists of products acquired in a finished condition, ready for sale without further processing. 3 types of inventory, each representing a different stage in the manufacturing process: 1. Raw material inventory plastic, steel, or the fabrics: 2. Work in process inventory goods that are in the process of being manufactured. Consignment inventory, goods a company is holding on behalf of the goods" owner: 3. Goods in transit, inventory items being transported: reported on the balance sheet of the owner, not the company transporting it.
