LESSON 19-1 Determining the Quantity of Merchandise Inventory

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Presentation transcript:

LESSON 19-1 Determining the Quantity of Merchandise Inventory 4/25/2018 LESSON 19-1 Determining the Quantity of Merchandise Inventory

The Most Efficient Quantity of Inventory Merchandise is the largest asset of a merchandise business. A merchandise inventory that is larger then needed has several problems Spends money for expensive store space Capital could be invested on other assets Requires a business to spend money on expenses like taxes and insurance premiums Inventory may become obsolete LESSON 19-1

Methods used to Determine the Quantity of Merchandise Inventory Two principal methods are used to determine the quantity of each item of merchandise on hand. Periodic Inventory- an inventory determined by counting, weighing, or measuring items of merchandise on hand Businesses are usually closed when doing inventory Perpetual Inventory- an inventory determined by keeping a continuous record of increases, decreases, and balance on hand LESSON 19-1

Inventory Record Businesses frequently establish their fiscal period to end when inventory is at a minimum because it takes less time to count a smaller inventory Inventory Record- a form used during a periodic inventory to record information about each item of merchandise on hand LESSON 19-1

INVENTORY RECORD page 566 1 3 2 1. Write the stock number and description before the periodic inventory begins. 2. Write the actual count in the No. of Units on Hand column. 3. Write the unit price and calculate the total cost after the physical inventory is completed. LESSON 19-1

Stock Record Stock Record- a form used to show the kind of merchandise, quantity received, quantity sold, and balance on hand Stock Ledger- A file of stocks records for all merchandise on hand LESSON 19-1

STOCK RECORD 1 3 2 1. Purchase information 2. Sales information page 567 1 3 2 1. Purchase information 2. Sales information 3. New balance on hand LESSON 19-1

TERMS REVIEW periodic inventory perpetual inventory inventory record page 568 periodic inventory perpetual inventory inventory record stock record stock ledger LESSON 19-1