ACCT20100 Chapter Notes - Chapter 7: Customer Satisfaction, Financial Statement, Finished Good
Document Summary
Chapter 7: reporting and interpreting cost of goods sold and inventory. Primary goals of inventory management: to have sufficient quantities of high-quality inventory available to serve custo(cid:373)ers" (cid:374)eeds, while (cid:373)i(cid:374)i(cid:373)izi(cid:374)g the costs of carryi(cid:374)g inventory (production, storage, obsolescence, and financing) Minimize the costs of carrying inventory: low quality inventory leads to customer dissatisfaction, returns, and decline in future sales. Roles of accounting system in inventory management process: 1. The system must provide accurate information for preparation of periodic financial statements and tax returns: 2. It must provide up-to-date information on inventory quantities and costs to facilitate ordering and manufacturing decisions: 3. Since new inventories are subject to theft and other forms of misuse, the system must also provide the information needed to help protect these important assets. Held for sale in the normal course of business. Used to produce goods or services for sale.
