BUSACC 0030 Lecture Notes - Lecture 7: Net Income, Income Tax, European Route E73
Document Summary
Material covered: chapter 7: reporting and interpreting cost of goods sold and inventory. Announcements: quiz during next class on chapter 7. Understanding the business: primary goals of inventory management a. i. Items included in inventory: merchandiser inventory, manufacturing b. i. Costs included in inventory purchases: the cost principle requires that inventory be recorded at the price paid or the consideration given b. Inspection costs: preparation costs, any purchase returns and allowances and purchase discounts taken are subtracted. Image on flow of inventory referenced on slide 7-5: for merchandiser inventory, it"s relatively simple, but for manufacturer it"g a bit more complicated, and you should know these steps. Cost of goods sold equation a. (beginning inventory) + (purchases) = goods available for sale b. (goods available for sale) (ending inventory) = cost of goods sold. Vii. inventory costing methods: specific identification, first in, first out (fifo, last-in, last-out (lifo, weighted average.
