This chapter emphasizes accounting for inventory. We describe methods for assigning costs to inventory and we explain the items and costs making up merchandise inventory. We also discuss methods of estimating and measuring inventory.
Conceptual |
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Identify the items making up merchandise inventory. (p. 224) |
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Identify the costs of merchandise inventory. (p. 225) |
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Analytical |
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Analyze the effects of inventory methods for both financial and tax reporting. (p. 231) |
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Analyze the effects of inventory errors on current and future financial statements. (p. 234) |
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Assess inventory management using both inventory turnover and days' sales in inventory. (p. 236) |
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Procedural |
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Compute inventory in a perpetual system using the methods of specific identification, FIFO, LIFO, and weighted average. (p. 226) |
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Compute the lower of cost or market amount of inventory. (p. 233) |
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Appendix 6A-Compute inventory in a periodic system using the methods of specific identification, FIFO, LIFO, and weighted average. (p. 241) |
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Appendix 6B-Apply both the retail inventory and gross profit methods to estimate inventory. (p. 245) |