Inventory Flashcards
Purchases - Net of Discounts, Freight, Warehouse expenditures
Inventory
FOB Shipping Point puts the inventory into the hands of the buyer from the loading dock
Inventory
FOB Destination keeps the items in the seller’s inventory until it reaches the buyer
Inventory
Sales Commissions
Interest on liabilities to vendors
Shipping expense to customers
Inventory
Under the gross method, discounts are recorded only when used.
Inventory
Under the net method, discounts are recorded whether used or not.
Unused discounts are allocated to financing expense.
Inventory
Gross Margin : Sales - COGS (BI + P - EI)
Inventory
Inventory is counted at certain times throughout the period
Weighted-average cost flow method is used.
Inventory
Inventory count continually updated
Uses a moving-average cost flow method
Inventory
Under the FIFO system, periodic and perpetual inventory methods will both have the same ending inventory.
Inventory
COGS / Average Inventory
Inventory
365 / Inventory Turnover
Inventory
The CONSIGNOR holds the consigned items in their inventory count. The cost includes the shipping to the consignee.
Inventory
No. Consignment goods are maintained in the inventory of the consignor, not the consignee.
Inventory
Misstatement of beginning inventory does NOT have an effect on ending retained earnings.
Misstatement of ENDING inventory does have an effect on retained earnings.
Inventory
EI Over : COGS Under : ERE Over
EI Under : COGS Over : ERE Under
Inventory
The first (oldest) inventory you have in stock is the first inventory you record for COGS purposes. If your oldest inventory on the shelf cost you $1 when you bought it, COGS is $1
This is just for inventory pricing. It has nothing to do with physically selling the oldest item on the shelf - It is purely for accounting purposes
Inventory
The last (newest) inventory you have in stock is the first inventory you record for COGS purposes. If your newest inventory on the shelf cost you $1.50 when you bought it, COGS is $1.50
Inventory
COGAS / Total Units : Weighted Average Cost Per Unit
Inventory
FIFO’s relationship to COGS will be opposite LIFO’s relationship to COGS in periods of falling/rising prices.
Inventory
FIFO has the Lowest COGS
FIFO is a cat that sees a mouse starts Low and is Rising
If COGS is Low, that means EI is High
Inventory
FIFO has the Highest COGS
Remember: FIFO, that silly cat, got High from Catnip and is Falling off the couch
If COGS is High, that means EI is Low
Inventory
Market Ceiling : Net Realizable Value : Selling Price - Selling Costs
Market : Replacement Cost
Market Floor : Net Realizable Value - Normal Profit
Inventory
