Ask any student of commerce and economics; the phrase inventory accounting sure rings a bell. The dynamics of inventory accounting is the most talked about topic in careers involving finance, accounting and supply chain management. By the time the students pass out of their degree course, each of them becomes almost an expert in the knowledge, methods, and scope of inventory accounting.However, assignments on inventory accounting can be monotonous and draining.As a student, they can seek inventory accounting homework help while investing their time in learning their lessons, preparing projects and cherishing the privileges of student life.
Working ones’ way around a settled system without disturbing the status quo yet achieving stunning results is the norm of the day.
Being a supply chain management professional for the last 10 years of my life, I worked smart as I juggled a demanding career and two clamorous kids. At the end of the day, I realized that smart work is worth the salt and is here to stay.
Budding young professionals can take a leaf out of my experience and start working their way up the corporate ladder using analytically sophisticated neocortex of the brain. The perfect legal way to work around stressful assignments is to find inventory accounting homework help and invest the saved time in knowing more about inventory accounting.
What is inventory accounting?
- Inventory is the piled up physical stock lying idle that has an economic value attached to it.
- A section of any organization is the dedicated custodian of the stock which can be in any form say, raw materials, and finished goods or work in process materials.
- Finished goods inventory is packed and put to sale in future while raw materials inventory is processed, packed and transformed into finished good before putting to sale.
- Sometimes, inventory not worth using or placing on the market is written off.
- Inventory accounting is a dynamic process involving a continuous and careful evaluation of certain factors influencing the planning of procurement.
- Inventory accounting homework help enables you to determine the health of supply chain function of an organization and has a gross impact on balance sheet and subsequently on the profit and loss of a company.
- In almost all the companies I worked with, procurement and logistics professionals happen to be the custodian of inventories and accountable for any increase in the stocks.
Inventory accounting being a dynamic process is inevitably fascinating, and no student ever complains of the same being mundane. The assignments, however, has a different story to tell with its deadline and maintenance of designated quality. Students, therefore resort to inventory accounting homework help to tide over the crises.
Proper management of inventory reduces the cost of piled up goods and increases profitability of a business. Management requires correct forecast, demand planning of materials, budgeting with an additional focus on distribution strategy to liquidate the procured stocks.
Valuation of inventory depends on the accounting methods used to evaluate the cost of the goods sold during an accounting period and has a direct impact on the earning of the business.
Beginning inventory + procurement cost – ending inventory = cost of goods sold
To know more about inventory accounting, we need to stay well informed about the various methods associated with inventory accounting.
Inventory accounting can be categorized into few broad divisions:
- Specific identification method
- Weighted average method
- First in first out (FIFO) method
- Last in first out (LIFO) method
Seeking inventory accounting homework help makes you aware of the various methods and their applicability in detail.
Specific identification method
- This method rigorously takes into account cost of each item in the inventory and charge the specific cost to the cost of the goods sold.
- Requires massive data tracking and hence not free from error.
- It’s viable for high-cost unique items.
Weighted average method
- Procurement cost changes over a certain time period and does not remain constant.
- This method makes sure there exists only one layer of inventory cost using specific mode of calculation.
First in first out method
- Goods that are procured first are sold or distributed first if it’s a retail concept.
- This method is rampant in perishable goods industry as the goods come with an expiry date.
- With rising prices in the economy, the first procured materials are associated with lowest cost thereby reducing the overall cost of goods sold.
- The implication of this method is higher operative earning and a greater outflow of income taxes.
Last in first out method
- As the name suggests, piled up stocks lying in the inventory is the freshly procured stocks.
- The method is banned under International Financial Reporting Standards as it increases the cost of goods sold resulting in lower operating profit and lower income taxes.
All these methods involve a robust data management system in place to ensure accurate assessment and maintenance of fair practice. Most of the companies have adopted SAP or various similar resilient software accounting systems in keeping up with the internationally accepted practice of inventory accounting.
Challenges which compels students to seek inventory accounting homework help
- Disparity and inconsistency of data
- Involvement of various methods and processes makes the student undergo a lot of confusion
- Missing, unreliable and insufficient data pose a grave problem to young minds that end up feeling hapless and discouraged.
- The overlapping functionality of inventory accounting requires great focus and understanding of the associated subjects.
Inventory accounting homework help takes you deeper in the world of inventory management which has undergone a sea change over the last two decades and remained a backbone of supply chain business. Advanced technology has further contributed to the development of various vendor management modules wherein an interface connects the vendor with the client directly facilitating procurement planning as well as inventory management. Exposure to such modules enables the dynamics of cost-benefit analysis at any given point of time and demand planning, and forecasting becomes hassle free thereby reducing the overall risk.