Ending Work in Process

At the end of an accounting period a manufacturing business will have goods which are only partially completed. These goods will be included in the balance sheet current assets as work in process (WIP), under the heading of inventory. Work in process is sometimes referred to as work in progress.

Last modified October 23rd, 2019 by Michael Brown
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Inventory Count Sheet Template

This free inventory count sheet template can be used by a business to produce inventory count sheets for recording the results of a physical inventory count at the end of an accounting period. Free PDF download.

Last modified July 16th, 2019 by Michael Brown
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Supplies on Hand

All businesses use small consumable items such as paper, pens, paperclips, light bulbs, hand towels etc. Normally a small amount of these items is kept available for immediate use, and this is referred to as supplies on hand.

Last modified January 15th, 2020 by Michael Brown
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Specific Identification Inventory Method

The specific identification inventory costing method is a way of determining the cost of goods sold and the value of the ending inventory. Under the specific identification inventory method, it is assumed that each unit of inventory can be identified and traced from purchase to sale.

Last modified July 16th, 2019 by Michael Brown
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Lower of Cost or Market Rule for Inventory

Lower of cost or market is a term used to refer to the method by which inventory is valued and shown in the balance sheet of a business. The lower of cost and market rule states that the inventory must be shown at the lower of cost or replacement cost subject to upper and lower limits on replacement cost.

Last modified July 16th, 2019 by Michael Brown
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Retail Inventory Method

The retail inventory method is a method of estimating the value of closing inventory in the absence of a physical inventory count at the end of an accounting period.

As the name implies, the retail method is used primarily by retailers who often maintain their memorandum inventory records at retail values. The method involves the follows steps.

Last modified December 18th, 2019 by Michael Brown
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Inventory Accounting System

A business can account for its inventory using one of two accounting inventory systems either the periodic or perpetual inventory system.

The period inventory system is less time consuming to maintain but does not provide details of the inventory and costs of sales during the accounting period. In contrast, the perpetual inventory system requires details of each inventory movement to be recorded, but is ideal in situations such as a retail environment, where accurate levels of inventory are required at all times.

Last modified January 7th, 2020 by Michael Brown
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