BU127 Lecture 8: Chapter 8
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BU127 Full Course Notes
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Reporting and interpreting cost of sales and inventory. Inventory tangible property held for sale in the normal course of business or used in producing goods or services for sale. Used to produce goods or services: merchandise inventory, raw materials inventory, work in process inventory. Costs included in inventory purchases bd05350: the cost principle requires that inventory be recorded at the price paid or the consideration given. Include all costs incurred to bring the asset to useable or saleable condition. Beginning inventory + purchases = goods available for sale: goods available for sale ending inventory = cost of sales. Separation of inventory accounting and physical handling of inventory. Storage in a manner that protects from theft and damage. Provides up-to-date cost of sales records: perpetual, system bd05515_ In a periodic inventory system, ending inventory and cost of sales are determined at the end of the accounting period based on a physical count.
