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 March 10th, 2017 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 November 6th, 2016 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 May 8th, 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 May 8th, 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 May 4th, 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 May 4th, 2019 by Michael Brown
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Accounting for Insurance Proceeds

The accounting for insurance proceeds journal entries below act as a quick reference, and set out the double entry bookkeeping postings required to deal with an insurance claim for damaged inventory.

Last modified April 30th, 2019 by Michael Brown
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LIFO Reserve

The LIFO reserve is an account used to reconcile the difference between the FIFO and LIFO methods of inventory valuation, when a business is using the FIFO method as part of its accounting system but is using the LIFO method to report in its financial statements.

Last modified April 20th, 2019 by Michael Brown
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