Inventories

What is the LIFO Conformity Rule? Definition, Explanation, and More

Companies need revenues to stay in business. Usually, these revenues come from the sales of products and services. While services are perishable, companies can store products and sell them to various customers. These products form a company’s inventory or stocks. For product-based companies, inventories are crucial in generating sales and satisfying customer demand. There are …

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What are Work-in-Progress (WIP) inventories? Definition, Calculation, Example, and More

Many companies sell physical products, which constitute their primary income source. Some companies may manufacture these products while others acquire them from an external source. Usually, companies also keep their stock in hand so they can meet customer demand when it arises. These may include raw materials, finished goods, or work-in-progress inventory. Every type of …

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Inventories Costing: Method, Example And More

Overview Inventory costing is an integral part of inventory control and inventory management. It helps a business determine its cost of goods sold and eventually in gross profits. Different inventory costing methods can bring the different cost of goods sold results. Although a business can use any inventory costing method. Certain methods have discrete benefits …

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Accounting for Consignment Inventory (Definition, Treatment, Journal Entry, and Example)

Definition: Consignment inventory represents stock legally owned by one company or business but held by another. Usually, the risks and rewards associated with consignment inventory remain with the company that owns it. Consignment inventory is common in industries where companies transfer their goods to the dealer, which distribute or sell them further. The dealer, in …

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Accounting for Goods in Transit (Explanation, Examples, Treatment, and Journal Entries)

What Is Goods In Transit? Goods in Transit indicates the stock that is bought from the purchaser and delivered through a dealer, nonetheless, the merchandise is in transit but still needs to arrive at the proposed buyer. Towards the ending of an accounting time frame, such stock items permit exceptional consideration for accounting such merchandise …

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How to organize inventory for small businesses? 5 Importance Tips

Inventory management Inventory management is the efficient mechanism of ordering, storing, and use of the company’s inventory. The process includes the management of raw materials, components as well as finished goods. Further, the management of warehoused products and work in process items also fall under efficient inventory management. Inventory management helps to know when to …

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