ACCTG 102 Lecture Notes - Lecture 3: Corporate Social Responsibility, Accounting Today, Activity-Based Costing
Document Summary
Balance sheet; b/s of a manufacturer may have 3 inventory accounts whereas merchandiser has one. Fg inventory represents what is available for sale. Inventories are generally listed in order of liquidity. (most liquid to least: finished goods, work-in-process, raw materials. Much of the us economy is service oriented. Greater than 50% of us workers are employed by service companies. Services are consumed immediately by consumers and manufactured goods often have a long lead time before consumption. It is important to learn the accounting for a manufacturer as they use the broadest range of accounts. Service businesses do not have inventory however, like a manufacturer, a service business needs to keep track of its costs to determine whether it s profitable. For a service provider its biggest cost will be the cost of its personnel. Instead of a cost of good manufactured schedule a service provider would prepare a cost of services provided schedule.
