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Cost Of Goods Available For Sale
Cost of goods available for sale is the maximum amount of goods, or inventory, that a company can possibly sell during an accounting period. It has the formula:{{Cite book , url=https://www.worldcat.org/oclc/81601239 , title=Intermediate accounting , date=2007 , publisher=J. Wiley & Sons Canada , others=Kieso, Donald E. , isbn=978-0-470-83979-9 , edition=8th Canadian , location=Mississauga, Ont. , oclc=81601239 Beginning Inventory (at the start of accounting period) + purchases (within the accounting period) + Production (within the accounting period) = cost of goods available for sale Notice that purchases and production might not be the same throughout the year, since purchase cost and production cost might vary. But at the end, the total cost of purchases and production are added to beginning inventory cost to give cost of goods available for sale. Alternatively the costs of goods available for sales can be computed from the costs of sales: Costs of goods available for sale − ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Inventory
Inventory (American English) or stock (British English) refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation. Inventory management is a discipline primarily about specifying the shape and placement of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials. The concept of inventory, stock or work in process (or work in progress) has been extended from manufacturing systems to service businesses and projects, by generalizing the definition to be "all work within the process of production—all work that is or has occurred prior to the completion of production". In the context of a manufacturing production system, inventory refers to all work that has occurred—raw materials, partially finished products, finished products prior to sale and departure from the manufacturing system. I ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Beginning Inventory
An inventory valuation allows a company to provide a monetary value for items that make up their inventory. Inventories are usually the largest current asset of a business, and proper measurement of them is necessary to assure accurate financial statements. If inventory is not properly measured, expenses and revenues cannot be properly matched and a company could make poor business decisions. Inventory accounting system The two most widely used inventory accounting systems are the periodic and the perpetual. * ''Perpetual:'' The perpetual inventory system requires accounting records to show the amount of inventory on hand at all times. It maintains a separate account in the subsidiary ledger for each good in stock, and the account is updated each time a quantity is added or taken out. * ''Periodic:'' In the periodic inventory system, sales are recorded as they occur but the inventory is not updated. A physical inventory must be taken at the end of the year to determine the cost o ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Purchase
Purchasing is the process a business or organization uses to acquire goods or services to accomplish its goals. Although there are several organizations that attempt to set standards in the purchasing process, processes can vary greatly between organizations. Purchasing is part of the wider procurement process, which typically also includes expediting, supplier quality, transportation, and logistics. Details Purchasing managers/directors, and procurement managers/directors guide the organization’s acquisition procedures and standards. Most organizations use a three-way check as the foundation of their purchasing programs. This involves three departments in the organization completing separate parts of the acquisition process. The three departments do not all report to the same senior manager, to prevent unethical practices and lend credibility to the process. These departments can be purchasing, receiving and accounts payable; or engineering, purchasing and accounts payab ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Production (economics)
Production is the process of combining various inputs, both material (such as metal, wood, glass, or plastics) and immaterial (such as plans, or knowledge) in order to create output. Ideally this output will be a good or service which has value and contributes to the utility of individuals. The area of economics that focuses on production is called production theory, and it is closely related to the consumption (or consumer) theory of economics. The production process and output directly result from productively utilising the original inputs (or factors of production). Known as primary producer goods or services, land, labour, and capital are deemed the three fundamental production factors. These primary inputs are not significantly altered in the output process, nor do they become a whole component in the product. Under classical economics, materials and energy are categorised as secondary factors as they are byproducts of land, labour and capital. Delving further, primary factor ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Cost Of Goods Sold
Cost of goods sold (COGS) is the carrying value of goods sold during a particular period. Costs are associated with particular goods using one of the several formulas, including specific identification, first-in first-out (FIFO), or average cost. Costs include all costs of purchase, costs of conversion and other costs that are incurred in bringing the inventories to their present location and condition. Costs of goods made by the businesses include material, labor, and allocated overhead. The costs of those goods which are not yet sold are deferred as costs of inventory until the inventory is sold or written down in value. Overview Many businesses sell goods that they have bought or produced. When the goods are bought or produced, the costs associated with such goods are capitalized as part of inventory (or stock) of goods. These costs are treated as an expense in the period the business recognizes income from sale of the goods. Determining costs requires keeping records of g ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
