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Inventories - Coggle Diagram
Inventories
PAS 2 describes it as;
materials or supplies needed for rendering services
used to produce sales
Assets held for sale
Transportation Cost
FOB Destination
By Ownership: vested to buyer upon receipt of goods.
By transit: seller is the owner and responsible for freight charges.
FOB Shipping Point
By Ownership: vested to buyer upon shipment of goods.
By transit: buyer is the owner and responsible for freight charges.
Recording transactions
Perpetual Inventory System
Physical counting of goods is made at the end of accounting period.
Inventories are not updated
Periodic Inventory System
Physical count is matched with the record at least one a year
Inventories are updated.
Inventory Valuation
FIFO First In, First Out
Goods that were bought first will be also sold first.
Remaining goods are the recently bought ones.
LIFO Last In, First Out
Goods that were last to bought are the one that will be sold first
Not allowed by th PFRS