Inventory

Inventory

Inventory or stock is a short term business asset of ‘stocks of goods’.

In accounting terms these balances do the following;

 allow for the resale or trading or for using them to make, manufacture or produce a product for sale.

This infographic shows how inventory is reported on the Income Statement.

What is periodic and perpetual inventory?

There are several methods of valuation for the business accounting records. Some of these are First In First Out (FIFO), weighted average, and being able to specifically identify and value inventory items.

Now learn more about this and other accounting topics with low cost business tutorials.

10

Jan'18

What is Perpetual and Periodic Inventory?

Perpetual and Periodic Inventory Understanding the difference between perpetual and periodic inventory is important. As the image shows, the Income Statement appears different for the two methods. Periodic inventory systems are based on a more old fashioned system where inventory counting and valuation comes from stock-takes. So inventory is physically counted …

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10

Jan'18

What is Inventory?

What is Inventory or Stock? Inventory (or stock) is a short term business asset of ‘stocks of goods’. These balances allow for the resale or trading or for using them to make, manufacture or produce a product for sale. Inventory is classified as a current asset. Asset items that are turned over …

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