Accounting for Inventory

Upon successful completion of this course, participants will be able to:

• Identify the types of inventory and recognize the timing of inventory ownership.
• Specify the situations in which the periodic inventory system should be used, and how the perpetual system can be enhanced.
• Identify the situations that can cause incorrect inventory transactions.
• Recognize the activities needed to establish a system of inventory record keeping, and how such a system may be rendered less accurate.
• Estimate ending inventory using the retail method.
• Identify the contents and calculation methods used for all systems of cost layering.
• Recognize the calculation methods for and causes of variances from standard costs.
• Identify the accounting for and uses of a job costing system.
• Specify the calculation methods and inputs needed to operate a process costing system.
• Specify the contents of and controls over the use of overhead.
• Identify who is responsible for spotting obsolete inventory, as well as the methods used to account for it.
• Recognize the cost classifications used in the lower of cost or market rule.
• Specify the accounting for spoilage, scrap, and rework.
• Identify the methods of allocation for joint costs and by-products.
• Recognize the disclosures associated with inventory.
• Identify the contents of the various accounting entries needed to record inventory transactions.
• Identify the rules promulgated by the Internal Revenue Service that relate to inventory.
• Itemize the pricing methods that can be used to compile transfer prices between subsidiaries, as well as the issues associated with each one.
• Identify the controls that can be used in the purchasing, receiving, and shipping of inventory.
• Specify the kinds of inventory-related activities that can be fraudulently employed to alter financial results or steal assets.
• Identify those policies that can be used to support accounting transactions related to inventory.
• Recognize the calculation methods used for the various budgets that include inventory, as well as the issues to consider when constructing these budgets.
• Specify how the results of various inventory measurements can be interpreted, when these measurements should be used, and the types of behavior they can reinforce.