武汉理工大学：《会计学》课程教学课件（英文）06 Inventory

Chapter 6Inventory

1 Chapter 6 Inventory

Inventory Defined: Inventory refers to various assets that arestocked for the purpose of sale, productionor consumption during the process ofproduction for a business

Inventory Defined • Inventory refers to various assets that are stocked for the purpose of sale, production or consumption during the process of production for a business

1Inventory Systems存货制度

Ⅰ Inventory Systems 存货制度

Inventory SystemsPerpetual inventory system永续盘存制Periodic inventory system定期盘存制

Perpetual inventory system 永续盘存制 Periodic inventory system 定期盘存制 Inventory Systems

Perpetual vs. Periodic Systems.Perpetualinventory system- Detailed records of the number of units and thecost of each purchase and sale are preparedTHROUGHOUT the period.Periodic inventory system- System of accounting where cost of goods sold isdetermined and inventory is adjusted at theEND of the accounting period, not whenmerchandise is purchased or sold

5 Perpetual vs. Periodic Systems • Perpetual inventory system – Detailed records of the number of units and the cost of each purchase and sale are prepared THROUGHOUT the period. • Periodic inventory system – System of accounting where cost of goods sold is determined and inventory is adjusted at the END of the accounting period, not when merchandise is purchased or sold

Computing the Cost of InventoryCost of inventory on hand = Quantity X unitcost Physical count is made at least once ayear, even with a perpetual system. Consigned goods are excluded

Cost of inventory on hand = Quantity × unit cost Computing the Cost of Inventory • Physical count is made at least once a year, even with a perpetual system. • Consigned goods are excluded

Inventory CountsInventory countsNecessary under both the periodic and theperpetual method.With a periodic system, a physical count is theonly way to get the information necessary tocompute cost of goods sold.Under perpetual method, physical countsallow companies to determine inventoryshrinkage.Shrinkage equals the difference between whatending inventory should be what the count revealsit is

7 Inventory Counts • Inventory counts – Necessary under both the periodic and the perpetual method. – With a periodic system, a physical count is the only way to get the information necessary to compute cost of goods sold. – Under perpetual method, physical counts allow companies to determine inventory shrinkage. • Shrinkage equals the difference between what ending inventory should be what the count reveals it is

Perpetual SystemIt maintains a continuous record forinventory on hand.It is often used by a business that sellsproducts of high unit value

Perpetual System • It maintains a continuous record for inventory on hand. • It is often used by a business that sells products of high unit value

Perpetual Inventory CostsInventory cost data to demonstratePerpetual SystemsItem127BUnitsCostPrice10$201Jan.Inventory47$30Sale81021Purchase22431Sale28232Sale103022Purchase

Perpetual Inventory Costs Inventory cost data to demonstrate Perpetual Systems Item 127B Units Cost Price Jan. 1 Inventory 10 $20 4 Sale 7 $30 10 Purchase 8 21 22 Sale 4 31 28 Sale 2 32 30 Purchase 10 22

Perpetual Inventory Card (FIFO)Item127BPurchasesCost of Mdse.SoldInventoryBalanceUnitUnitTotalUnitTotalTotalDateQty.Qty.CostCostCostCostCostCostQty.1020200Jan. 1720341402060310821206016882116822320601217212114722142528211055301022212201051022220181315$388$263S325Totals

Item 127B Purchases Cost of Mdse. Sold Inventory Balance Unit Total Unit Total Unit Total Date Qty. Cost Cost Qty. Cost Cost Qty. Cost Cost Jan. 1 10 20 200 4 7 20 140 3 20 60 10 8 21 168 3 20 60 8 21 168 Perpetual Inventory Card (FIFO) 22 3 20 60 1 21 21 7 21 147 28 2 21 42 5 21 105 30 10 22 220 5 21 105 10 22 220 Totals 18 $388 13 $263 15 $325