Thursday, June 18, 2009

inventory and financial statement

inventory is one of the most important and possibly largest item on the balance sheet for company that either produce or sells goods. inventory not only shows up on the balance sheet as an asset, but it is also an important item on the income statement as part of calculation of the cost of goods sold. for a merchandising company, cost of goods sold is usually one of the largest expense items on the income statement. because of this, inventory is a critical account in the accounting process.

internal links;
1- this link about classifications of inventory
2- this link about valuing the inventory when it purchased

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