Sales and Inventory System

3214 WordsSep 10, 201213 Pages
TABLE OF CONTENTS - CHAPTER 11 I. CHAPTER 11 – INVENTORY 1 II. OVERVIEW AND OBJECTIVES 1 A. Overview 1 B. Objectives 1 III. DEFINITION OF INVENTORY 1 IV. INTERNAL CONTROLS 2 V. ESTABLISHING AND MAINTAINING AN INVENTORY 2 VI. VALUING THE INVENTORY 4 A. FIFO 5 B. Weighted Average 6 VII. YEAR-END PHYSICAL INVENTORY 7 VIII. EXHIBITS 8 CHAPTER 11 – INVENTORY The purpose of this chapter of The Guide is to explain the concept of inventory and to discuss the policies, guidelines, and procedures associated with inventory on the Boulder campus. OVERVIEW AND OBJECTIVES 1 Overview Each department’s purchases of goods for consumption or resale may represent inventory. Departments that hold inventory…show more content…
Selection of the specific account codes is determined by the type of inventory. 030000: Inventory-Sales External to University This account presents the value of inventories on hand that are expected to be sold to customers outside of the university. 040000: Inventory-Internal Sales/Consumed This account is similar to account 030000, above, but consumption takes place inside of the university, and is charged as an expenditure. 040001–0400xx: User Defined Inventory Accounts Accounts within this range are similar to account 040000. Consumption of the goods takes place within the university and is charged to supplies or other appropriate expense accounts. For a complete list of user defined inventory accounts, go to the Chart of Accounts, accessible from the System Controller’s website. The value of a department’s inventory normally fluctuates due to purchases and sales that occur during each accounting period. The Balance Sheet Statement Detail reports the inventory value. The Revenue and Expense Statement Summary presents the amount of sales and provides the amount for cost of goods sold. Inventories increase when purchases are made or when goods are returned by customers. Inventories decrease as a result of sales, consumption of goods, or when goods are returned to vendors. Each department with an
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