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One among other accounting issues, which is inevitable, in the inventory area is having future value of inventory that is in doubt (e.g. inventory items that...
While management of a company may consider whether using periodic or perpetual inventory system—in the aim of getting inventory system that fits into their operation, accountants...
Inventory accounting is a wide topic. I would need to write a book to cover every bit of it. But through this post I am going...
A product financing arrangement is a transaction in which an entity sells and agrees to repurchase inventory with the repurchase price equal to the original sales...
Rather than being recognized in the cost of goods sold or some other expense category within the current period, some overhead costs can be charged off...
In order to correctly understand the mechanics and implications of a firm’s working capital, we need to take into account a firm’s financial needs for operation,...
Many industries are characterized by high seasonality. A seasonal business is one in which the majority of its sales occurs during a short period each year,...
Many treasury departments find that their performance falls outside of a company’s normal set of performance metrics. The standard of performance is earnings before interest, taxes,...
There are two types of entities for which the accounting for inventory is relevant. The merchandising entity [generally referred to as a retailer, dealer, or wholesaler/distributor]...
A tax deduction (also called a tax write-off) is an amount of money you are entitled to subtract from your gross income (all the money you...
Your business sells products both at retail to consumers and to other businesses. You extend short-term credit to your business customers. Over the years, you have...
Sometimes businesses get into trouble and unintentionally find themselves in liquidity traps. Liquidity traps come in a variety of shapes, sizes, and forms and, to a...
The most inexplicable event for a senior-level manager is to see a profit at the bottom of the income statement, and yet field a request from...
Obsolete inventory is any inventory for which there is no longer any use, either through inclusion in viable manufactured goods or by direct sale to customers....
A major ongoing debate within many departments of a company is the appropriate level of inventory to maintain. Though every business would attempt to reduce its...
How are Economic Order Quantity (EOQ), Economic Production Run (EPR), Re-order Point, and Safety Stock determined and computed? Read this post for the answers. Typically it...
This post contains three forms and seven reports related to the inventory function. Some of these forms, such as the receiving log and inventory tag, are...
The classical view of inventory data collection is that of employees filling out forms of various kinds throughout the warehouse and production areas, which are then...