Flows of Inventory …A Retailer or A merchandiser Merchandise Purchases Cost of Goods Sold Merchandise Inventory Merchandiser
Flows of Inventory …A Producer or A Manufacturer Direct Labour Factory Overhead Raw Materials Inventory Work in Process Inventory Finished Goods Inventory Cost of Goods Sold Manufacturer Raw Materials
Balance Sheet… Raw Materials Work in Process Finished Goods Balance Sheet: Assets Side Manufacturing Overhead Labour
Profit and Loss Account … Profit and Loss Account: Expenses Side Opening Stock Purchases and Production and Conversions Expenses Closing Stock COST OF GOODS SOLD Raw Materials Work in Process Finished Goods Raw Materials Work in Process Finished Goods
Impact of Inventory Flow… Beginning Inventory Purchases for the Period Ending Inventory (Balance Sheet) Goods Available for Sale Cost of Goods Sold (Income Statement) + +
When to record Inventory in books of accounts?