财务会计概念与应用英文版.pptVIP

* * * * * * * * * * * * * 12 * * * * 110 * * * COPYRIGHT ? 2008 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. * Chapter 7 Inventory Albrecht, Stice, Stice, Swain * Types of Inventory Raw materials Materials purchased for use in manufacturing process. Work in process Partially completed units in production. Finished goods Manufactured products ready for sale. Cost of goods sold Costs incurred to purchase or manufacture the merchandise sold during the period. * Costs Included in Inventory What costs are included in inventory? Raw materials Labor costs Manufacturing overhead The indirect manufacturing costs associated with producing inventory. Freight in costs * Who Owns the Inventory? When goods are in transit? Q: Who owns inventory on a truck or railroad car? A: The party who is paying the shipping costs. When goods are on consignment? Q: Who owns inventory stocked in a warehouse? A: The supplier until the inventory is sold. The warehouse owner stocks and sells the inventory and receives a commission on sales as payment for services rendered. * Perpetual vs. Periodic Systems Perpetual inventory system Detailed records of the number of units and the cost of each purchase and sale are prepared THROUGHOUT the period. Periodic inventory system System of accounting where cost of goods sold is determined and inventory is adjusted at the END of the accounting period, not when merchandise is purchased or sold. * Perpetual vs. Periodic Method Inventory is purchased: Inventory 500 Accounts Payable 500 Transportation costs: Inventory 10 Cash 10 Purchase returns: Accounts Payable 50 Inventory 50 Purchase discounts: Account Payable 450 Inventory 9 Cash 441 Inventory is purchased: Purchases 500 Accounts Payable 500 Transportation costs: Freight In 10 Cash 10 Purchase returns: Accounts Payable 50 Pur