In this unit, we will cover the following topics related to inventory accounting:
- Introduction to Inventories
In this section, we will introduce the concept of inventories and discuss the different types of inventories found in merchandising and manufacturing businesses.
- Importance of Inventories
In this section, we will examine the importance of accurately tracking and valuing inventories in businesses, as they can have significant effects on financial statements.
- Effect of Ending Inventory on Financial Statements
In this section, we will delve into the ways in which ending inventory can impact the current and following period's financial statements.
- Inventory Systems: Periodic vs Perpetual
In this section, we will compare and contrast the two main inventory systems: periodic and perpetual.
- Determining Actual Quantities in the Inventory
In this section, we will look at how businesses can determine the actual quantities of inventory on hand through physical counts and the consideration of factors such as goods in transit and consignment.