ACCT I S 100 Chapter Notes - Chapter 6: Retained Earnings, Income Statement, Accounting Equation

• School: UW-Madison
• Department: Accounting And Info Systems
• Course: ACCT I S 100
• Professor: Warfield Terry

Document Summary

5) need only 1 inventory classification merchandise inventory. Just in time (jit) inventory manufacturing goods just in time for use by having reliable suppliers and creating an industry competitive advantage (dell) Determining inventory quantities involves 2 steps: 1) physical inventory count 2) determining ownership. Goods in transit whoever has legal title to the goods on the carrier has ownership. Consigned goods holding a good of another party, but without taking ownership. Inventory costing accounted for at cost and used to determine total cost of inventory and cogs. Specific identification positively identifying which units are sold and which are not. Could be done with a limited variety of items, but practice is rare. Cost flow assumptions assuming flows of costs that are unrelated to actual physical flow of goods (the following 3 methods are for the periodic system) (beginning inventory + purchases) ending inventory = cost of goods sold.