Inventory
Any material or good in anyone custody for performing activities is known as inventory. Inventory in business of furniture or electronics or else is placed for resale purpose. Inventory is in different forms that is tangible, intangible, eatables or etc.
LIFO and FIFO method of inventory is used to calculate the cost of the present inventory and to find out the actual ending inventory. FIFO and LIFO have their own pros and cons. We are comparing both the methods in terms of various issues.
The gross profit method can be used to calculate the average inventory at the end of a particular accounting period. The basic use of gross profit method of inventory accounting occurs when inventory has to be calculated physically between the certain accounting periods. This
As we all know an inventory is a detailed record of all the stored goods or items business posses for a certain period of time. Inventory gives the status of costs to all the products or items stored in it. On the other hand
Inventory Turnover Ratio or Stock Turnover Ratio (ITR) : Every firm has to maintain a certain level of inventory or stock of finished goods so as to be able to meet the requirements of the business. But the level of inventory should neither be
Stock Control: Definition and Explanation: The materials purchased by a concern may be classified as stock items which are taken into store and held until required, or as direct deliveries to the point of consumption. The control of those materials which are stock items
Requirements of a System of Materials Control: The important requirements or essentials of adequate satisfactory system of materials control are as follows: Proper Coordination Competent Purchasing Agent Use of Standard Forms Control by Budgeting Materials and Equipment Storage Location Operation of Perpetual Inventory Standards
Re-order Level or Ordering Point or Ordering Level: Definition and explanation of re-order point Formula of re-order level or ordering point Examples Definition and explanation: This is that level of materials at which a new order for supply of materials is to be placed.
Similarities Between Job Order and Process Costing System: Learning Objectives of this article: What are the differences and similarities in process costing and job order costing procedures. Similarities between job order costing and process costing systems can be summarized as follows. Both systems have
Physical Inventory – Inventory Valuation: Even with a perpetual inventory system, periodic physical counts are necessary to discover and eliminate description between the actual count and the balances on materials ledger card. These descriptions may be due to: Errors on transferring invoice data to
Minimum Limit or Minimum Level of Stock: Learning Objective: Definite and explain minimum limit or minimum level of stock. How is minimum limit or minimum level calculated? Definition and Explanation: The minimum level or minimum stock is that level of stock below which stock
Maximum Level or Maximum Limit of Stock: Learning Objective: Definite and explain maximum limit or maximum level of stock. How is maximum limit or maximum level calculated? Definition and Explanation: The maximum stock limit is upper level of the inventory and the quantity that
Materials Ledger Card–Perpetual Inventory: As purchased materials go through the systematic verification of quantities, prices, physical condition, and other checks, the crux of the accounting procedure is to establish a perpetual inventory – maintaining for each type of material a record showing quantities and
Materials and Inventory Cost Control: After studying this chapter you should be able to: Materials control is the system that ensures the provision of the required quantity and quality at the required time with in the minimum of investment. It covers the following functions:
Danger Level of Materials or Inventory Stock: Definition and Explanation: Some enterprise also calculate danger level. When this level of stock is reached, then emergency steps are taken by the management to acquire material supplies. When danger level is reached, the try is made