MGMT 20000 Chapter Notes - Chapter 6: Current Asset, Finished Good, Income Statement

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

Document Summary

Inventory includes items a company intends for sale to customers: 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. 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 in which they are incurred. Expenses - are the consumption of assets for the purpose of generating revenue. Relationship between inventory and cost of goods sold. Beginning inventory . 000 (asset) + purchase during the period . 000 (asset) = cost of goods available for sale . 000: ending inventory . 000 (asset in bal. Sheet: cost of goods sold . 000 (expense in inc.