CHAPTER 7 INVENTORIES

Inventories

Finished goods; Work in process; Raw materials and supplies

Inventory of government entity

Held for; Sale, Distribution, Manufacturing, Consumption; Semi - Expandable Property

Inventories measurement

Measured at Cost

Goods held for sale measurement

Lower of Cost and Net realizable value

Goods held for distribution

Lower of Cost and Current replacement cost

Net Realizable Value (NRV

estimated selling price less estimated costs of completion

Current replacement cost

cost the entity would incur acquire the asset on the reporting date.

Specific identification

this shall be used for items that are not ordinarily interchangeable (i.e., unique)

Specific identification

Under this formula, specific costs are attributed to identified items of inventory.

Weighted average cost

this shall be used for large numbers of items of inventory that are ordinarily interchangeable

weighted average cost

Under this formula, a new weighted average unit cost is computed after every purchase; used in determining the cost of goods sold and inventory on hand

Perpetual inventory system

Under this system, purchases, sales, and other transactions affecting inventory are recorded in the "inventory" and "cost of sales" accounts, as appropriate

End users

refer to the individuals who will actually be using the items

Purchase request

Basis in preparing the Purchase order

Purchase order

document issued to the supplier when making a purchase; canvass from at least 3 suppliers required for purchases amounting to 1,000 and above.

Inspection and Acceptance Report

The IAR will be used by the Property Inspector in inspecting and accepting the delivered items