QST AC 221 Lecture 10: CLASS 10 - Inventory & COGS
26 Oct 2018
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Inventory and cost of goods sold (1: compute cogs, dr. cogs (se, cr. Inventory basics: inventory are goods held by a company for the purpose of sale to customers, different from items that held for consume by the firm. Called supplies or supplies inventory : inventory are current assets, firm sells inventory firm consumes the assets and record expense (cogs) on income statement, sales revenue - cost of goods sold = gross profit. Initial balance sheet value of an asset: the cost of any asset (inventory) is the sum of all the costs incurred to bring the asset to its intended use less any discounts. Inventory costs: retailers & wholesalers: inventory is reported on the balance sheet at its cost, including, acquisition (including applicable taxes & fees) price paid, freight in (but, not freight out, less: returns, allowances & discounts.
