Inventories

Question 1

What is inventory?

Answer 1

Asset for sale/consumption

asset = reliably measurable,
eco. benefits flow to entity
control of resource

Question 2

What is inventory?

Answer 2

Asset for sale/consumption

Inventories are assets:
a) held for sale in the ordinary course of
business;
b) in the process of production for such
sale; or
c) in the form of materials or supplies to be
consumed in the production process or in
the rendering of services

Question 3

How do we record inventory?

Answer 3

full amt, less amt or 0
triggers = returned goods, legally banned, outdated inventory
Lower of Cost
OR
NRV (mkt willing to pay = proceeds - selling costs, if no proceeds, nrv =0)

Question 4

Inventory Write Down impact on bs and IS

Answer 4

Decrease in NI
- coz write down is a loss
Decrease in current assets - duh
DR inv loss
   CR inventory