BA 211 Chapter Notes - Chapter 6: Perpetual Inventory, Accounts Payable, Barcode

• School: Oregon State University
• Department: Business Administration
• Course: BA 211
• Professor: Amy Bourne

Document Summary

Chapter 6: inventory & cost of goods sold. Show how to account for inventory: a sto(cid:396)e"s (cid:271)ala(cid:374)(cid:272)e sheet (cid:396)epo(cid:396)ts u(cid:374)sold ite(cid:373)s as still (cid:271)ei(cid:374)g held i(cid:374) i(cid:374)(cid:448)e(cid:374)to(cid:396)(cid:455) The income statement reports both the revenue from (marked up price) and the cost (purchase price) of sold items. Inventory is an asset (the cost of inventory on hand = inventory) The cost of goods sold is the expense (cid:894)the (cid:272)ost of i(cid:374)(cid:448)e(cid:374)to(cid:396)(cid:455) that"s (cid:271)ee(cid:374) sold = (cid:272)ost of goods sold(cid:895) There is a difference between the sale price of inventory and the cost of inventory: sales revenue is based on the sale price of inventory sold, cost of goods sold is based on the cost of inventory sold. Companies do not include in inventory any goods they hold on consignment because those goods belong to another company. They do include their own inventory that is on consignment and held for sale by another company.