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Mastering Inventory Accounting: From Merchandising Transactions to Cost Flow Assumptions
What you’ll learn
- Understand and process various types of merchandising transactions, including the purchase and sale of inventory.
- Comprehend and apply knowledge of sales discounts, purchase discounts, sales returns, allowances, and inventory shrinkage.
- Calculate and interpret the cost of goods sold in different types of businesses.
- Differentiate between perpetual and periodic inventory systems and identify the pros and cons of each.
- Understand what is included in the cost of inventory, including freight costs, insurance costs, and discounts.
- Grasp inventory flow assumptions such as specific identification, first in first out (FIFO), last in first out (LIFO), and weighted average methods.
- Apply FIFO, LIFO, and weighted average methods under both periodic and perpetual inventory systems.
- Recognize the intricacies and challenges of inventory tracking.
- Prepare and interpret financial statements of a merchandising company.
- Solve comprehensive problems covering the full accounting cycle for a merchandising company, including recording financial transactions, adjusting entries, and
- Improve their test-taking skills and tackle multiple choice questions and short calculation questions related to inventory accounting.
Requirements
- We should have a basic understanding of financial accounting and debits and credits.
Who this course is for:
- Business and accounting students seeking to deepen their understanding of inventory management and merchandising transactions, whether they are beginners or in advanced stages of their studies.
- Professionals in the fields of accounting, finance, or business management who deal with inventory and merchandising transactions as part of their work.
- Entrepreneurs and small business owners who handle their own accounting and inventory management, and want to ensure they are doing it correctly and efficiently.
- Anyone preparing for a job that involves managing inventory or dealing with merchandising transactions, and wants to bring a solid foundation of knowledge to their role.
- Individuals interested in understanding more about the financial operations of a business, particularly those related to the buying and selling of inventory.
Description
Dive deep into the world of inventory accounting with this comprehensive course focused on merchandising transactions and cost flow assumptions. This course is perfect for anyone seeking a thorough understanding of how to handle inventory costs, cost flows, and various related transactions.
Starting with the essentials, we will examine the purchase and sale of inventory, including important associated topics like sales discounts, purchase discounts, sales return, and allowances. You will learn how to account for shrinkage and how to perform a cost of goods sold (COGS) calculation, both crucial aspects of inventory management.
We will then broaden your knowledge of different inventory systems. By comparing and contrasting perpetual and periodic inventory systems, you will gain insights into the benefits and drawbacks of each. Understanding when to use which system in practice is a key skill this course aims to instill.
Delving deeper, we’ll explore inventory costs and cost flows. You’ll discover what’s included in the inventory cost and how to account for various inventory-associated costs, such as freight, insurance, and discounts. This knowledge will equip you to accurately represent inventory value in financial reporting.
A critical part of this course is dedicated to inventory flow assumptions. Here, we study specific identification, first in first out (FIFO), last in first out (LIFO), and weighted average methods. These methods will be examined in the context of both perpetual and periodic inventory systems, giving you a comprehensive understanding of their application.
The course employs a variety of engaging materials to aid learning:
- Downloadable PDF Files – These serve as handy offline references.
- Excel Practice Files – Preformatted files for honing your Excel skills and practicing adjustments.
- Multiple Choice Practice Questions – Perfect for enhancing test-taking abilities and understanding course material.
- Short Calculation Practice Questions – These focus on reducing complex problems to simpler calculations.
- Discussion Questions – Offering the chance to explore topics with your instructor and fellow students.
Our instructor, a certified public accountant (CPA) and chartered global management accountant (CGMA) with a master’s in taxation, brings a wealth of practical and teaching experience. Having dealt with a multitude of technical accounting issues and taught numerous accounting classes, he knows how to help students learn best. His experience in curriculum development ensures the course is logically structured, making complex topics and software accessible.
By the end of this course, you’ll have a robust understanding of merchandising transactions, inventory tracking methods, inventory costs, and much more. Our comprehensive problems provide practical application, simulating real-world accounting scenarios. This course is an invaluable resource for anyone keen to master inventory accounting.
