文档介绍：Inventories and Cost of Sales Chapter 6
INVENTORIES AND COST OF SALES
Chapter 6
Conceptual Chapter Objectives
C1: Identify the items making up merchandise inventory
C2: Identify the costs of merchandise inventory
Analytical Chapter Objectives
A1: Analyze the effects of inventory methods for both financial and tax reporting
A2: Analyze the effects of inventory errors on current and future financial statements
Procedural Chapter Objectives
P1: Compute inventory in a perpetual system using the methods of specific identification, FIFO, and weighted average
P2: Appendix 6A: Compute inventory in a periodic system using the methods of specific identification, FIFO, and weighted average
DETERMINING INVENTORY ITEMS
Merchandise inventory includes all goods that pany owns and holds for sale, regardless of where the goods are located when inventory is counted1>.
Items requiring special attention include:
Goods in Transit
Goods Damaged or Obsolete
Goods on Consignment
C 1
FOB Destination Point
Public Carrier
Seller
Buyer
GOODS IN TRANSIT
Public Carrier
Seller
Buyer
FOB Shipping Point
Ownership passes to the buyer here.
C 1
GOODS ON CONSIGNMENT
Merchandise is included in the inventory of the consignor, the owner of the inventory.
Consignor
Consignee
Thanks for selling my inventory in your store.
C 1
GOODS DAMAGED OR OBSOLETE
Damaged or obsolete goods are not counted in inventory if they cannot be sold.
Cost should be reduced realizable value if they can be sold.
C 1
DETERMINING INVENTORY COSTS
Invoice Cost
Include all expenditures necessary to bring an item to a salable condition and location.
Minus Discounts and Allowances
Plus Import Duties
Plus Freight
Plus Storage
Plus Insurance
C 2
INTERNAL CONTROLS AND TAKING A
PHYSICAL COUNT
panies take a physical count of inventory at least once each year.
When the physical count does not match the Merchandise Inventory account, an adjustment must be made.
Good internal controls over