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.

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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.

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Gross Profit Method of Estimating Inventory

In the absence of a physical inventory count at the end of an accounting period, the gross profit method is a method of estimating the value of ending inventory using historical gross profit percentages.

Gross Profit Method of Estimating Inventory November 6th, 2016Team
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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.

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Lower of Cost or Market

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.

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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.

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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.

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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 mdct.ru postings required to deal with an insurance claim for damaged inventory.

Accounting for Insurance Proceeds December 6th, 2017Team
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Cost of Inventory Determination

The cost of inventory includes the costs of purchase, the costs of conversion, and other costs of bringing the inventory to its present location and condition.

Cost of Inventory Determination August 8th, 2017Team
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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.

LIFO Reserve November 6th, 2016Team
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