Ashford Accounting

Ashford 4: - Week 3 - Instructor Guidance WEEK 3 point out:   size up Overview Over the last three weeks we lose defined the monetary statements used in business, how they are inter related to, how to prepare journal entries, localize the books and close the books for a detail accounting period. Now that we prolong the books closed, what happens next? One of the components of financial accounting: understanding specific balance sheet accounts, how they function within the financial statements and how to spy the transactions of each. This week we look at the neckcloth account. Inventory: What is it? Every company buys merc reachise, rough for resale, possibly materials to turn into products, and of ground level items that are used in the course of business, the most harsh of those being office supplies. The easiest way to distinguish between an neckcloth item and an expense is to apply 2 criteria to any leverage: 1)    is the purchased product held for resale or used in making products for resale, and, 2)    is the purchase, if held for some period of time, a material purchase, significant enough to have an impact on the presentation of the financial statements? The reason I make these two distinctions is that last part: materiality and the related matching principle.

If I own a retail blood I rarely sell everything I get during the cal mop upar month by the end of the month. Even more importantly, at the end of the course, do I have items I purchased which are excuse on the shelves on the last day of the year? If I do, and most retailers will, the items must be accounted for so that the purchases are non included in that years costs. The Matching Principles says I match revenues and expenses. Well, if I earn the revenue next year I cannot include the expenses in this current year. Most of us can see the need to keep track of inventory; it is an assets that must be accounted for and safeguarded to assure the firm has products on hand to sell in the future. And it is money,... If you want to get a all-embracing essay, order it on our website: Ordercustompaper.com

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