Acaydia School of Aesthetics LLC Track of Inventory Discussion

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Accounting for Inventory is really important, therefore there are some crucial factors that must be taken into consideration.

Classifying/determining inventory is needed in a merchandising/manufacturing firm because these companies need to describe and quantify the many different items that make up the total inventory; this is done to check the accuracy of the perpetual inventory records. Inventory costing revolves around the cost/expenditures necessary to acquire all goods in order for them to be placed in a condition/environment that is ready to sell. Inventory errors happen when there is a failure to count or price the inventory correctly, other cases include when firms fail to properly recognize the transfer of legal title to goods that are in transit. Statement presentation and Analysis is a process of multiple steps that includes the cost of goods subtracted from sales. The statement presentation includes the firms balance sheet that gives them the reported inventories within that current asset that defies their financial statements. The firms analysis helps the inventory management handle and analyze every swiftly so that there are no high carrying costs due to great quantity and variety. Analysis also helps evaluate the inventory to avoid low inventory levels.