BU127 Lecture 8: Chapter 8
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BU127 Full Course Notes
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Document Summary
Chapter 8: reporting and interpreting cost of sales and inventory: Roles of the accounting system: provides accurate information, provides up to date information, provides information to help protect assets. Primary goals of inventory management: provide sufficient quantities of high quality inventory, minimize the costs of carrying inventory. Inventory is tangible property held for sale in the normal course of business or used in producing goods or services for sale: tangible, held for sale, used to produce goods or services. Cost principle requires that inventory be recorded at the price paid or the consideration given. Include all costs incurred to bring the asset to useable or saleable condition. Merchandiser: merchandise purchases, merchandise inventory, cost of sales. Manufacturer: raw materials, raw materials inventory, work in process inventory: Include direct labour and factory overhead: finished goods inventory, cost of sales. Beginning inventory + purchase = goods available for sale. Goods available for sale ending inventory = cost of sales.
