ACC 100 Chapter Notes - Chapter 6: European Cooperation In Science And Technology, Unit, Income Tax

• School: Ryerson University
• Department: Accounting
• Course: ACC 100
• Professor: Majed Alqasas

Document Summary

Important for managers/owners to know how much inventory a business has so do not run. Out/ lose sales (customers will buy elsewhere and not come back!) Also, don"t want too much inventory e. g if stock up on tons of iphones but then newer model comes out - nobody wants the old model anymore. In ch 5: cost of inventory was the same for every purchase. However, in reality, the cost of inventory varies - e. g. price increases due to changes in product demand. To properly track inventory, we use a system that assigns costs to each unit of inventory and calc. The cost of goods sold of each unit sold. There are 3 systems: (1) : specific identification (2) : average cost (3) : first in, first out (fifo: specfic identification cost of every single item of inventory is calc. If they sell the gold necklace for 000: revenue is 000 (increase), cash increases 000.