BU227 Lecture Notes - Lecture 8: Current Asset, European Cooperation In Science And Technology, Income Statement
Document Summary
Items acquired by purchase, growth (food), or extraction (natural resources) for processing into finished goods. Included in raw materials inventory until used, at which point they become part of work-in-process inventory: work-in-process inventory. Being manufactured but not yet complete: finished goods inventory. Manufactured goods that are complete and available for sale: cost principle: the sum of applicable expenditures and charges directly/indirectly incurred in bringing an article to a usable or saleable condition and location (not current value) Perpetual inventory system record is maintained for each type of merchandise stocked, showing: units and cost of the beginning inventory, units and cost of each purchase, units and cost of the goods for each sale. When each sale is recorded, a companion cost of sales entry is made, decreasing inventory and recording cost of sales. Periodic inventory system: count of the goods remaining on hand is required at the end of each period.
