RSM219H1 Study Guide - Final Guide: Financial Statement Analysis, Current Asset, Current Liability

• School: UTSG
• Department: Rotman Commerce
• Course: RSM219H1
• Professor: Elisa Zuliani

Document Summary

Differences between perpetual and periodic inventory systems 4. Chapter 8 long term assets 5. Weighted average steps inventory write down chapter 12. Inventory: items bought for resale or used in production of goods that is then sold. All companies have inventory apart from service companies. Merchandisers or retailers: purchase goods to sell to consumers. Inventory for manufacturers are items used in manufacturing of products. [raw materials + work-in-process + finished goods] Inventory is the most significant current asset. It is the largest asset that would be converted into cash within the next year. Objective of a company: sell inventory at a higher price than purchased. Steps in achieving objective: choosing the right suppliers, suppliers are those who provide items on a timely basis, *location of supplies *delivery time etc, considering the amount of inventory to purchase. Companies look at the cost of inventory.