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Accounting - Measuring and Reporting Inventory

Learn more about measuring, recording, and reporting inventories with this free online accounting course.

Accounting
Free Course
This free online accounting course teaches you about measuring and reporting inventory. You will study this process from the physical counting of goods to the inclusion of costs such as transport or insurance, to the calculation on the value of the goods thereby connecting the cost of goods to retained earnings and the balance sheet. You will also look into the different methods of apportioning costs to a stock item, and more!

Description

Modules

Outcome

Certification

View course modules

Description

This course begins with a discussion on merchandise inventory. You will learn that merchandise inventory is goods that have been acquired with the intention of being sold to third parties and can be the single largest asset on the balance sheet of some types of businesses. You will learn how to determine the inventory costs as well as study the four inventory costing methods which include specific identification, first-in, first-out (FIFO), last-in, first-out (LIFO), and weighted-average.

You will then study the pros and cons of the four costing methods. You will look into their advantages such as low startup costs, price control, quality control, and agility as well as the disadvantages such as high time input, scalability, and limited product choices. This course will also discuss journal entries for the perpetual inventory procedure and departures from the cost basis for inventory measurement. You will learn that assets should be reported at historical cost in order to avoid distortion in the value of assets as they change over time, and more.

Having proper knowledge of the accounting procedures will help you make accurate inventory figures and avoid the serious consequences of inaccuracy. Upon the completion of this course, you will become more familiar in calculating the cost of ending inventory and cost of goods sold under the four major inventory costing methods using periodic and perpetual inventory procedures, analyzing and use the financial results-inventory turnover ratio, and more. Check out this course and learn how to allocate inventory costs flow for the wholesale and retail sectors today!

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Learning Outcomes

Having studied this course learners will be able to:


  • Explain and calculate the effects of inventory errors on certain financial statement items;
  • Indicate which costs are properly included in inventory;
  • Calculate cost of ending inventory and cost of goods sold under the four major inventory costing methods using periodic and perpetual inventory procedures;
  • Explain the advantages and disadvantages of the four major inventory costing methods;
  • Record merchandise transactions under perpetual inventory procedure;
  • Apply net realizable value and the lower-of-cost-or-market method of inventory;
  • Estimate cost of ending inventory using the gross margin and retail inventory methods;
  • Analyze and use the financial results-inventory turnover ratio.

Certification

All Alison courses are free to enrol, study and complete. To successfully complete this Certificate course and become an Alison Graduate, you need to achieve 80% or higher in each course assessment. Once you have completed this Certificate course, you have the option to acquire an official Certificate, which is a great way to share your achievement with the world. Your Alison Certificate is:

Ideal for sharing with potential employers - include it in your CV, professional social media profiles and job applications
An indication of your commitment to continuously learn, upskill and achieve high results
An incentive for you to continue empowering yourself through lifelong learning

Alison offers 3 types of Certificates for completed Certificate courses:

Digital Certificate - a downloadable Certificate in PDF format, immediately available to you when you complete your purchase
Certificate - a physical version of your officially branded and security-marked Certificate, posted to you with FREE shipping
Framed Certificate - a physical version of your officially branded and security-marked Certificate in a stylish frame, posted to you with FREE shipping

All Certificates are available to purchase through the Alison Shop. For more information on purchasing Alison Certificates, please visit our FAQs. If you decide not to purchase your Alison Certificate, you can still demonstrate your achievement by sharing your Learner Record or Learner Achievement Verification, both of which are accessible from your Dashboard. For more details on our Certificate pricing, please visit our Pricing Page.

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