Chapter 3: Inventory

Question 1

What is the inventory equation (balance sheet)?

Answer 1

Inventory = units of inventory x cost per unit of inventory

Question 2

What is the COGS equation (income statement)?

Answer 2

COGS = units of sold inventory x cost per unit of inventory

Question 3

What does physical goods consist of?

Answer 3

1. Inventory on hand
2. Units in transport
3. Submitted goods

Question 4

What are two inventory systems?

Answer 4

1. Perpetual systems

2. Periodic systems