Lecture Accounting principles (11E): Chapter 6 - Coby Harmon

Prepared by<br /> Coby Harmon<br /> University of California, Santa Barbara<br /> Westmont College<br /> <br /> 6-1<br /> <br /> 6<br /> <br /> Inventories<br /> <br /> Learning Objectives<br /> After studying this chapter, you should be able to:<br /> [1] Determine how to classify inventory and inventory quantities.<br /> [2] Explain the accounting for inventories and apply the inventory cost flow<br /> methods.<br /> [3] Explain the financial effects of the inventory cost flow assumptions.<br /> [4] Explain the lower-of-cost-or-market basis of accounting for inventories.<br /> [5] Indicate the effects of inventory errors on the financial statements.<br /> [6] Compute and interpret the inventory turnover.<br /> 6-2<br /> <br /> Preview of Chapter 6<br /> <br /> Accounting Principles<br /> Eleventh Edition<br /> Weygandt Kimmel Kieso<br /> 6-3<br /> <br /> Classifying Inventory<br /> Merchandising<br /> Company<br /> One Classification:<br /> <br /> Manufacturing<br /> Company<br /> Three Classifications:<br /> <br /> Inventory<br /> <br /> Helpful Hint Regardless of the<br /> classification, companies report<br /> all inventories under Current<br /> Assets on the balance sheet.<br /> <br /> 6-4<br /> <br /> <br /> <br /> Raw Materials<br /> <br /> <br /> <br /> <br /> <br /> Work in Process<br /> <br /> <br /> <br /> Finished Goods<br /> <br /> (See page 324)<br /> <br /> 6-5<br /> <br />