ACCT 410x Chapter Notes - Chapter 7: Income Statement, Weighted Arithmetic Mean
Document Summary
Ch. 7: reporting and interpreting cost of goods sold and inventory, nature of inventory and cogs. Inventory= tangible property that is held for sale in normal course of business. Merchandise inventory, raw materials, work in process: cost of goods sold equation finished. Sales revenue is number of units sold x sales prices. Cost of goods sold is same number of units x unit costs. Bi + p - ei = cogs: perpetual inventory systems. Purchases transactions are recorded directly in an inventory account. A detailed inventory record is maintained, recording each purchase and sale during the ap: periodic. Ending inventory and cost of goods sold are determined at the end of the ap an d based on a physical count. Identifies the cost of the specific item that was sold. Requires keeping track of purchase cost of each item its impractical with large quantities of similar items. Works for expensive unique items such as houses or.
