ADMN 3221H Chapter Notes - Chapter 8: Gross Profit, Subledger, Weighted Arithmetic Mean
11 Nov 2017
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Document Summary
Inventory is classified as a current asset: a merchandising company, has one inventory account on the balance sheet called merchandise. Inventory accounting systems: an accurate inventory accounting system is important for, ensuring availability of inventory items, preventing excessive accumulation of inventory items. Just-in-time (jit) inventory order systems have helped reduce inventory levels: the perpetual system maintains a continuous record of inventory changes, the periodic system updates inventory records in the ledger only periodically. Perpetual system: purchases of inventory and cost of inventory sold are recorded directly in the. Inventory is valued at the lower of cost and net realizable value (lc&nrv: net realizable value (nrv) is the estimated selling price less the estimated costs to complete and sell. Inventories measured at net realizable value if: sale is assured, or there is active market and minimal risk of not completing the sale, and, costs of disposal can be estimated.
