会计英语 第十一单元.ppt

Unit Eleven Inventory Learning Objectives: 1 Scope of inventory in two kinds of company. 2 Definition and classification of inventory. 3 Distinction between perpetual inventory system and periodic inventory system. 4 know about the four cost flow assumption 一Scope of inventory Merchandise company : all goods owned hold for sale manufacturing company ： （1）new materials （2）work-in-process goods （3）finished goods 二 Definition and classification of inventory 1 Definition： aggregation of tangible properties. (on BS: after accounts receivable) 2 classifications: （1）Merchandise inventory ： finished goods further assembled （2）production inventory ： 1) raw material ：finished / assembled 2) Work-in-process : direct material cost / direct labor/ overhead costs 3) finished (same) 4) production supplies (3) contracts in progress (costs of performing services) (4) miscellaneous 三 How to determine inventory value? How to determine cost of goods sold? summary Attention: under periodic inventory system cost of goods sold＝beginning inventory ＋net purchase－ending inventory acquisition _____inventory _____sold (cost) (net asset decrease, expense increase) In order to allocate the total cost of goods available for sale between expense (cost of goods sold) and asset (ending inventory) Four cost flow assumption (accounting policy choice) 1 specific identification_____ priced at the amounts listed on the purchase invoices. (high-cost low-volume items) 2 average cost ＝total cost of goods available for sale ÷ total number for sale average cost × units of the ending inventory＝ending inventory cost (items are identical) 3 first-in first-out_____ assumption that first merchandise acquire is the first merchandise sold. (adopted by any business) 4 last-in first-out _____ the most recently acquire goods are sold first. (adopted by any business) Attention: Price increase: FIFO-----inventory increase-----income increase L