{"id":145,"date":"2015-03-18T23:56:27","date_gmt":"2015-03-18T23:56:27","guid":{"rendered":"https:\/\/courses.candelalearning.com\/finacct2x10xmaster\/?post_type=chapter&#038;p=145"},"modified":"2017-10-16T13:28:17","modified_gmt":"2017-10-16T13:28:17","slug":"merchandise-inventory","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/chapter\/merchandise-inventory\/","title":{"raw":"Merchandise Inventory","rendered":"Merchandise Inventory"},"content":{"raw":"<h3>LEARNING OBJECTIVES<\/h3>\r\nYou will be able to describe the basis for inventory valuation and \u00a0you will be able to:\r\n<ul>\r\n \t<li>Define merchandise inventory.<\/li>\r\n \t<li>Calculate ending inventory and cost of goods sold under the <em>periodic<\/em> inventory system using FIFO, LIFO, Weighted Average and Specific Identification methods.<\/li>\r\n \t<li>Describe factors considered when selecting and inventory method and the effects of such a selection on the financial statements.<\/li>\r\n \t<li>Apply the lower-of-cost-or-market rule.<\/li>\r\n \t<li>Explain internal control issues and procedures for inventory.<\/li>\r\n \t<li>Describe the impact of inventory errors on financial statements.<\/li>\r\n \t<li>Calculate ending inventory and cost of goods sold under the\u00a0<em>perpetual<\/em> inventory system using FIFO, LIFO, and Weighted Average methods.<\/li>\r\n<\/ul>\r\n&nbsp;\r\n\r\nWhat is merchandise inventory?\u00a0 Watch this short video to find out.\r\n\r\nhttps:\/\/youtu.be\/yB-J2mFntWs\r\n<p class=\"GTtextbody\">Inventory is often the largest and most important asset owned by a merchandising business. The inventory of some companies, like car dealerships or jewelry stores, may cost several times more than any other asset the company owns. As an asset, the inventory figure has a direct impact on reporting the solvency of the company in the balance sheet. As a factor in determining cost of goods sold, the inventory figure has a direct impact on the profitability of the company\u2019s operations as reported in the income statement. Thus, the importance of the inventory figure should not be underestimated.<\/p>","rendered":"<h3>LEARNING OBJECTIVES<\/h3>\n<p>You will be able to describe the basis for inventory valuation and \u00a0you will be able to:<\/p>\n<ul>\n<li>Define merchandise inventory.<\/li>\n<li>Calculate ending inventory and cost of goods sold under the <em>periodic<\/em> inventory system using FIFO, LIFO, Weighted Average and Specific Identification methods.<\/li>\n<li>Describe factors considered when selecting and inventory method and the effects of such a selection on the financial statements.<\/li>\n<li>Apply the lower-of-cost-or-market rule.<\/li>\n<li>Explain internal control issues and procedures for inventory.<\/li>\n<li>Describe the impact of inventory errors on financial statements.<\/li>\n<li>Calculate ending inventory and cost of goods sold under the\u00a0<em>perpetual<\/em> inventory system using FIFO, LIFO, and Weighted Average methods.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p>What is merchandise inventory?\u00a0 Watch this short video to find out.<\/p>\n<p><iframe loading=\"lazy\" id=\"oembed-1\" title=\"9.1 What is inventory (stock)?\" width=\"500\" height=\"375\" src=\"https:\/\/www.youtube.com\/embed\/yB-J2mFntWs?feature=oembed&#38;rel=0\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p class=\"GTtextbody\">Inventory is often the largest and most important asset owned by a merchandising business. The inventory of some companies, like car dealerships or jewelry stores, may cost several times more than any other asset the company owns. As an asset, the inventory figure has a direct impact on reporting the solvency of the company in the balance sheet. As a factor in determining cost of goods sold, the inventory figure has a direct impact on the profitability of the company\u2019s operations as reported in the income statement. Thus, the importance of the inventory figure should not be underestimated.<\/p>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-145\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Shared previously<\/div><ul class=\"citation-list\"><li>Accounting Principles: A Business Perspective.. <strong>Authored by<\/strong>: James Don Edwards, University of Georgia &amp; Roger H. Hermanson, Georgia State University. . <strong>Provided by<\/strong>: Endeavour International Corporation.. <strong>Project<\/strong>: The Global Text Project.. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">All rights reserved content<\/div><ul class=\"citation-list\"><li>9.1 What is Inventory (stock)?. <strong>Authored by<\/strong>: Michael Allison. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/youtu.be\/yB-J2mFntWs\">https:\/\/youtu.be\/yB-J2mFntWs<\/a>. <strong>License<\/strong>: <em>All Rights Reserved<\/em>. <strong>License Terms<\/strong>: Standard YouTube License<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":1195,"menu_order":8,"template":"","meta":{"_candela_citation":"[{\"type\":\"copyrighted_video\",\"description\":\"9.1 What is Inventory (stock)?\",\"author\":\"Michael Allison\",\"organization\":\"\",\"url\":\"https:\/\/youtu.be\/yB-J2mFntWs\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"Standard YouTube License\"},{\"type\":\"cc\",\"description\":\"Accounting Principles: A Business Perspective.\",\"author\":\"James Don Edwards, University of Georgia & Roger H. Hermanson, Georgia State University. \",\"organization\":\"Endeavour International Corporation.\",\"url\":\"\",\"project\":\"The Global Text Project.\",\"license\":\"cc-by\",\"license_terms\":\"\"}]","CANDELA_OUTCOMES_GUID":"","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-145","chapter","type-chapter","status-publish","hentry"],"part":102,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters\/145","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/users\/1195"}],"version-history":[{"count":8,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters\/145\/revisions"}],"predecessor-version":[{"id":2300,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters\/145\/revisions\/2300"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/parts\/102"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapters\/145\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/media?parent=145"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/pressbooks\/v2\/chapter-type?post=145"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/contributor?post=145"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/clinton-finaccounting\/wp-json\/wp\/v2\/license?post=145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}