Inventory refer to goods, either raw, in-process, or finished, that a business intends to sell. Considering that inventory goods represent one of a business’s strongest assets, inventory must be carefully recorded and maintained within a system of records. Otherwise, mismanaged inventories may expire or be lost. When creating this system of records, there are two […]
When accounting for cost of goods sold, there are several means by which inventory pricing is determined. In maintaining and growing a company, inventory is often bought and sold at different prices instead of at a lump amount. At the end of an accounting period when purchased and sold items are calculated, there are several […]
When running a business, it is important to take stock of physical inventory to determine the financial health of the business. However, due to the size of inventories for many companies, calculating physical inventory on a regular basis may not be feasible, for time and money’s sake. Waiting until the end of a year to […]
Lower of cost or market is a rule intended to account for the possibility of losses in inventory value from drops in price or outmoded merchandise. It is a conservatism measure provided when inventory has fallen below current market and historical cost. Any of these losses are charged as cost of goods sold or loss […]