Question

1. Define & describe the three classifications of inventory for a manufacturing business. a. b. c....

1. Define & describe the three classifications of inventory for a manufacturing business.

a.

b.

c.

2. How are changes in inventory methods accounted for?

3. Define & describe:

a. Perpetual inventory

b. Period inventory

4.Define the following terms:

a. F.O.B. shipping point

b. F.O.B. destination

c. Consignment

Business   Accounting   
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Answer #1

A manufacturing business will identify three types of inventory classifications namely:

-- Raw materials: Raw materials inventory refers to raw materials that the business changes for the production of goods and/or services. Thus it is the basic material which is processed and converted into finished goods

-- Work in process: Work-in-process inventory refers to any unfinished goods that the business has produced.

-- Finished goods: Finished goods inventory refers to finished goods which are ready to sell. These goods are completed however are unsold goods

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