100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Previously searched by you
Previously searched by you
logo
Summary Ch 6 Inventories - Financial Accounting with International Financial Reporting Standards - FAC2 CA$9.94   Add to cart
Quickly navigate to
Preview
  2.  
  3. Hanzehogeschool Groningen (Hanze)
  4.  
  5. FAC2

Summary

Summary Ch 6 Inventories - Financial Accounting with International Financial Reporting Standards - FAC2
 8 views  0 purchase
  • Course
  • FAC2
  • Institution
  • Hanzehogeschool Groningen (Hanze)
  • Book
  • Financial Accounting with International Financial Reporting Standards

Provides in-depth summary of chapter 6. topics include Inventory Methods and Financial Effects ( First-In, First-Out (FIFO), Average-Cost, Lower-of-Cost-or-Net Realizable Value (LCNRV), LIFO Inventory Method

Preview 2 out of 10  pages

Document information

  • No
  • Unknown
  • February 12, 2024
  • 10
  • 2023/2024
  • Summary

Subjects

  • inventories
  • fifo
  • lifo
  • average cost
  • lcnrv
  • perpetual
  • periodic

Connected book

book image

Book Title:

Author(s):

  • Edition:
  • ISBN:
  • Edition:

More summaries for

  • FAC2601 Assignment 4 Semester 2 2024
  • FAC2601 Assessment 3 Semester 2 2024
  • Accounting Categories (Debit and Credit Balances) - Financial Accounting (FAC)
All for this textbook (33)

Written for

  • Hanzehogeschool Groningen (Hanze)
  • International Business and Management Studies
  • FAC2
All documents for this subject (13)

Seller

avatar-seller
amy5430

Reviews received

Content preview

Inventories
Chapter Number Chapter 6



📖 Table of Contents

Outline
6.1 Classifying and Determining Inventory
Determining Inventory Quantities
6.2 Inventory Methods and Financial Effects
Specific Identification
Cost Flow Assumptions
First-In, First-Out (FIFO)
Average-Cost
Financial Statement and Tax Effects of Cost Flow Methods
Income Statement Effects
Statement of Financial Position Effects
Tax Effects
Using Inventory Cost Flow Methods Consistently
6.3 Effects of Inventory Errors
Income Statement Effects
Statement of Financial Position Effects
6.4 Inventory Statement Presentation and Analysis
Lower-of-Cost-or-Net Realizable Value (LCNRV)
Analysis
6.5 Inventory Cost Flow Methods in Perpetual Inventory Systems
First-In, First-Out (FIFO)
Average-Cost
6.6 Estimating Inventories (Periodic System)
Gross Profit Method
Retail Inventory Method
6.7 LIFO Inventory Method




6.1 Classifying and Determining Inventory
Merchandising company has:

1. inventory owed by the company




Inventories 1

, 2. in a ready-for-sale form

Manufacturing company has:

1. finished goods

2. work in process

3. raw materials



📍 just-in-time (JIT) inventory
companies manufacture or purchase goods only when needed (low inventory levels)



Determining Inventory Quantities
perpetual system, take a physical inventory for the following reasons:

1. To check the accuracy of their perpetual inventory records.

2. To determine the amount of inventory lost due to wasted raw materials, shoplifting, or
employee theft.

periodic inventory system take a physical inventory for two different purposes:

1. to determine the inventory on hand at the statement of financial position date

2. to determine the cost of goods sold for the period.




📢 Determining inventory quantities involves two steps:

1. taking a physical inventory of goods on hand

2. determining the ownership of goods

a. Goods in Transit: purchased and not received ; sold but not delivered

i. FOB shipping point - ownership passes to buyer

ii. FOB destination - ownership of the seller

b. Consigned Goods: hold goods of other parties and sell goods for them for fee

i. ownership is still of the company




6.2 Inventory Methods and Financial Effects

⚠️ Inventory is accounted for at cost.
includes all expenditures to acquire goods and place them in a condition ready for sale



Specific Identification
If company can positively identify which particular units it sold and which are still in ending inventory
→ most companies make cost flow assumptions, about which units were sold


Cost Flow Assumptions


Inventories 2

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller amy5430. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for CA$9.94. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

75632 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy study notes for 14 years now

Start selling
CA$9.94
  • (0)
  Add to cart