shufe financial accounting财务会计.ppt

* Chapter 8: Inventories: Measurement. * For an item to be classified as inventory, the company must intend to sell it in the normal course of business. The item is either produced by the company or purchased by a supplier for resale. Raw materials inventory consists of the items that will be used in the production process. * We will look at inventory for two classes of businesses. For merchandising companies like Wal-Mart, goods are acquired from a supplier for resale to the final consumer. In a manufacturing operation, the company normally has three inventories. The first is raw materials, which makes up the items that will be used in the production process. The second inventory is work-in-process that consists of items that are being worked on, but are not yet complete. Finished goods inventory consists of items that are available for sale. * In this diagram, we see the typical inventory cost flow for a manufacturing company. The manufacturing company acquires raw materials, hires direct labor and incurs manufacturing overhead. As raw materials, direct labor and manufacturing overhead are used, they are transferred into work-in-process inventory. When an item in work-in-process inventory has been completed, it is transferred to finished goods inventory. Finally, finished goods are sold to the final customer, and transferred out of finished goods inventory and into cost of goods sold. * Our first learning objective in Chapter 8 is to explain the difference between a perpetual inventory system and a periodic inventory system. * We have two inventory systems available to record inventory transactions. The most common system is the perpetual inventory system, which is used by the overwhelming majority of companies. In the perpetual inventory system, inventory is continuously updated every time we have a purchase of an item for resale and every time we have a sale to a customer. In the periodic inventory system, we don’t determine cost of goods sold u