BU127 Lecture Notes - Lecture 11: Perpetual Inventory, Tangible Property, Finished Good
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BU127 Full Course Notes
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Document Summary
Reporting and interpreting cost of sales and inventory (chapter 8) Tangible property held for sale in the normal course of business or used in producing goods or services for sale. Cost principle requires that inventory be recorded at the price paid or the consideration given. Include all costs incurred to bring the asset to usable or saleable condition. Beginning inventory+ purchases for the period= goods available for sale. Cost of sales=cogs= beginning + purchases -ending inventory. Separation of inventory accounting and physical handling of inventory. Storage in a manner that protects from theft and damage tory. Storage in a manner that protects from theft and damage. Inventory is always kept up to date transaction by transaction, recording each purchase and sale. Ending inventory and cost of sales are determined at the end of accounting period based on a physical count. When units are sold, the specific cost of the unit sold is added to cost of sales.
