BUS 251 Study Guide - Final Guide: Combined Gas And Steam, Comprehensive Income, Debenture

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: All

Document Summary

Important current asset (and largest) for retailers and manufactures. Sell at higher price than purchased: select right suppliers, determining right amounts of inventory (prevent run out, pricing for profit, protecting inventory. Inventory classification: raw materials, work in process, finished goods. Determine who has ownership of the inventory: fob shipping point: buyer owns inventory when it leaves seller"s premises, fob destination : buyer owns inventory when it arrives to buyer, consignment: given to retailer (if sold, buyer owns) Company begins accounting period with previous period"s inventory. Cost of goods available for sale (cogas): beginning inventory + purchases. Cogas - ending inventory = cost of goods sold. All entries made at the end of accounting period. This is for cost effecting, cheaper to maintain the inventory system. Cost of good sold and inventory updated after every transaction. Cogas - cost of goods sold (cogs) = ending inventory. Ending inventory - actual ending inventory = theft, shrinkage.