About This Chapter
Accounting for Inventory - Chapter Summary and Learning Objectives
This chapter will provide you with an overview of accounting for inventory. Study concepts such as what inventory is and learn about systems that keep track of inventory. After viewing the engaging text and video lessons, use the quizzes to test your comprehension of things like:
- Merchandise inventory
- Differences between periodic inventory system and perpetual inventory system
- Inventory cost
- Inventory sales
- Beginning inventory vs. ending inventory
|What is Inventory? - Definition & Example||Analyze what an inventory is and why some businesses have one.|
|Items that Make Up Merchandise Inventory||Explain why merchandising companies need an inventory.|
|Periodic Inventory System: Definition, Advantages & Examples||Assess the advantages and disadvantages of a periodic inventory system.|
|Perpetual Inventory System: Definition, Advantages & Examples||Evaluate examples of a perpetual inventory system.|
|Inventory Cost: Definition, Methods & Types||Consider the costs of keeping an inventory.|
|Inventory Valuation Methods: Specific Identification, FIFO, LIFO & Weighted Average||Focus on cost flow assumption methods.|
|Net Realizable Value of Inventory: Definition & Method||Consider the role net realizable value plays in inventory valuation.|
|Calculating Beginning Inventory: Formula & Explanation||Analyze the importance to calculating the beginning inventory to account for inventory changes.|
|Calculate Ending Inventory: Formula & Explanation||Consider how ending inventory is used in businesses.|
|Accounting for Inventory Purchases||Evaluate how to calculate inventory purchase amounts.|
|Accounting for Inventory Sales||Focus on how inventory sales affect a business and accounting record|
1. What Is Inventory? - Definition & Example
Most businesses carry some inventory. In this lesson, you'll learn about what inventory is, some related concepts and be provided examples along the way. A short quiz follows the lesson.
2. Items that Make Up Merchandise Inventory
In order to operate, merchandising companies must carry inventory. What exactly makes up merchandise inventory? In this lesson, you will not only learn the answer to that question, but also several other important factors that relate to merchandise inventory.
3. Periodic Inventory System: Definition, Advantages & Examples
Business owners use inventory systems to track and update inventory. This lesson defines the periodic inventory system, outlines its advantages and disadvantages, and demonstrates its use with an example.
4. Perpetual Inventory System: Definition, Advantages & Examples
Businesses keep track of inventory through inventory systems. This lesson will focus on one type of system - perpetual inventory system. It will define perpetual inventory system, examine its advantages and give an example.
5. Inventory Cost: Definition, Methods & Types
Have you ever thought about how much it costs a business to keep inventory in stock? It's not just the price the business pays for the items that it keeps in stock. It is so much more. In this lesson, we will discuss exactly what constitutes actual inventory cost.
6. Inventory Valuation Methods: Specific Identification, FIFO, LIFO & Weighted Average
This lesson introduces you to the cost flow assumption methods of specific identification: FIFO, LIFO, and weighted average. You will also learn how to compute inventory in a perpetual system using the methods of FIFO, LIFO, and weighted average.
7. Net Realizable Value of Inventory: Definition & Method
Calculating inventory value is essential for correct reporting in accounting records. In this lesson, we are going to discuss what net realizable value is and why it plays an important role in inventory valuation.
8. Calculating Beginning Inventory: Formula & Explanation
One of the most important assets a company must protect and control is inventory. In this lesson, you'll learn how to calculate beginning inventory, which is the first step of accounting for inventory changes during an accounting period.
9. Calculate Ending Inventory: Formula & Explanation
This lesson will outline the concept of ending inventory and how it is used in business. Also, we will take a look at a balance sheet and explore the way in which investors use it as tool to gain a high-level view of the status of their companies.
10. Accounting for Inventory Purchases
A merchandising company must purchase inventory, and it has to be accounted for in the accounting records. In this lesson, you will learn how to calculate inventory purchase amounts as well as how to record them in the accounting journals.
11. Accounting for Inventory Sales
In order to operate, a business must make sales. In this lesson, we are going to discuss sales of inventory. You will learn the types of sales made, the items that affect sales profit, and the way to record sales in the accounting records.
12. Required Assignments Reminder
Sorry for the interruption to your course progress! We wanted to make sure you knew this course has a written assignment requirement in order to be completed. Read on to learn where to find these assignments and how to submit them.
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Other chapters within the Accounting 302: Advanced Accounting course
- Business Ownership Types
- Key Accounting Concepts
- Journals & Ledgers in Accounting
- Accounting Equations & Formulas
- Financial Statements, Balance Sheets & Income Statements
- Analyzing Financial Statements
- Financial Statement Ratios
- Accounting for Depreciation
- Accounting for Compensation, Taxes & Liabilities
- Adjustments & Closing Entries
- Corporate Accounting
- Departmentalized Accounting
- Taxation for Corporations
- Business & Financial Forecasting
- Required Assignments for Accounting 302
- Studying for Accounting 302