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The inventory costing method that reflects the cost flow in the reverse order and will report the earliest costs in ending inventory is?
The inventory costing method that reflects the cost flow in the reverse order and will report the earliest costs in ending inventory is last in first out. This makes use of a perpetual inventory system.
What is an inventory management about?
Inventory management concerns the control and flow of merchandise inventory. Usually computerized, inventory management keeps track of the amount of product on hand and the amount sold and it sometimes will automatically order more merchandise as needed. It is a way of optimizing sales.
How can a perpetual inventory system help a small business keep track of inventory?
A perpetual inventory system keeps track of inventory changes with every purchase, new order and return. This is different from the periodic inventory system where the inventory database is only updated once every several months. The perpetual inventory system, thanks to computing power, can help a small business know at all times what it has on hand, which allows it to place smaller orders at a time, which can help with the cash flow situation.
How do you work out cost of goods sold?
The cost of goods sold depends on (1) the inventory system used, and, (2) whether or not a cost flow assumption is used (and if so, which one).Inventory systemsThere are two inventory systems: the perpetual inventory system and the periodic inventory system.The perpetual inventory systemWith the perpetual inventory system, the inventory is updated with every purchase and expense. This implies that cost of goods sold is increases with every sale, at the time of each sale. The cost bases depends on the cost flow assumption used (see below)The periodic inventory systemWith the periodic inventory system, purchases are expensed, while with sales, cost of goods sold is not calculated. Hence, there is no system in place that can tell how much inventory there is.The inventory is counted at the end of the period. At this point in time, the cost of goods sold can be computed.Because:beginning inventory + purchases = ending inventory + cost of goods soldthis implies:cost of goods sold = purchases + beginning inventory - ending inventoryThe end of period count is a physical count. The $ value of the goods depend on the cost flow assumption (discussed next)Cost flow assumptionWhen goods are similar in nature (the company is trading coffee, oil, etc), the company can decide to assume some 'flow' of the goods for cost purposes. Common assumptions are:LIFO: Last in, first out: the most recent purchases are sold firstFIFO: First in, first out: the oldest inventories are soldAverage cost: An average cost is computedThe alternative is 'specific identification', meaning that no cost flow is assumed but the actual cost for the goods is determined (this requires some sort of information system).The cost of good soldDepending on choices (1) for inventory system and (2) cost flow assumption different values for cost of goods sold and ending inventory can be possible.For FIFO, the perpetual and periodic inventory will lead to the same cost of goods sold (as well as ending inventory value).For LIFO (as well as average cost), the cost of goods sold could very well differ for the perpetual inventory system and the periodic inventory system. With the periodic inventory system the cost of goods sold is determined at the end of the period. This means that for example purchases after the last sale are included for determining the cost of goods sold. This is not the case with the perpetual inventory system. With the perpetual inventory system this is done for each sale at the time of sale.
Does increase of inventory increase or decrease cash flow?
When adjusting your cash flow statement, you increase (add) a decrease of inventory and decrease (subtract) an increase of inventory
How know a flow chart of a real number system?
real numbers system chart
What is a system flow chart?
A system flow chart is widely used in economics. It typically represents a workflow, or an algorithm with a solution to a problem.
Flow-chart e-post office system?
postal system about flow chat
Which of the following is not a function of the inventory control area?
Reduce cash flow.
Flow chart of real number system?
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How DFD difffer from flow chart?
Flow Chart is a generic term, and DFD is a specific one. Data Flow Diagram (DFD) is a data flow chart to illustrate the data flow/store/change in a component/system/product from the input to the output.
What is the purpose of data flow diagram?
Go with the flow chart Go with the flow chart
The inventory costing method that reflects the cost flow in the reverse order and will report the earliest costs in ending inventory is?
The inventory costing method that reflects the cost flow in the reverse order and will report the earliest costs in ending inventory is last in first out. This makes use of a perpetual inventory system.
P0441 Evaporative Emission Control System Incorrect Purge Flow?
evaporative emission control system incorrect puge flow
Difference between flow chart and model?
A flow chart is a type of model, but not every model is a flow-chart.
Working flow chart for air conditioners and refrigerators?
Flow chart
Flow chart of planning process?
flow chart of plannning pocess
