Merchandising retailers and wholesalers use inventory costs to calculate the cost of goods sold as these are a major expense affecting net income and the balance sheet. In this accounting course learners are brought step-by-step through 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 through to retained earnings and the balance sheet.
The different methods of apportioning costs to a stock item, such as FIFO and LIFO, are discussed and topics such as net realization or gross margin are explained and explored. The importance of having accurate inventory figures and the serious consequences of using inaccurate inventory figures is also explained.
This accounting course will be of great interest to entrepreneurs and business professionals who would like to better understand how to allocate inventory costs flow for the wholesale and retail sectors, and to any learner who is interested in accounting as a future career.
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.
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 official Certification, which is a great way to share your achievement with the world. Your Alison Certification 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 Certification 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 Certification is available to purchase through the Alison Shop. For more information on purchasing Alison Certification, please visit our faqs. If you decide not to purchase your Alison Certification, 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 Certification pricing, please visit our Pricing Page.