Chapter 9. Accounting for Inventories. Inventory. Retailers: finished goods held for sale; balances can be large (77% of current asset & 25% of total assets for Wal-Mart) Manufacturers: raw materials, work-in-progress & finished goods
Accounting for Inventories
The perpetual inventory system provides a continuous record of Inventory and Cost of Goods Sold.
[goods available: $19,100]
Common ratios used in the management and evaluation of inventory levels are inventory turnover and average days to sell the inventory.
365 days / 8 times = every 45.6 days