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Accounting At Your Fingertips, 2e by George Murray, CPA.

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5.1 Accounting for Inventory

Major Inventory Issues

Classifying Inventory

Employing Inventory Systems

This subchapter offers a quick primer on the major issues related to inventory. We take you through how it’s classified and accounted for and help you choose an inventory system that works for your company.

Major Inventory Issues

Unless you’re in the service business, inventory is likely to be one of your company’s most significant assets. Inventory systems can be intimidating in their complexity, yet managing inventory isn’t that difficult if you stay focused on the major issues—valuation and costing.

Inventory represents items held for resale or product that will go into the manufacturing of goods to be sold.

Two separate accounting systems ...

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