Reasons for holding inventory, Financial Accounting

The dictionary explains the word 'inventory' as stock of goods. Although, inventory implies that such type of assets that will be disposed of in future in the common course of business. Bolten S.E. has explained this as, "inventory considers to the stock-pile of the product a firm is giving for sale and the elements that make up the product." Conversely, inventory is used to present the aggregate of those items of tangible assets that are:

(i) held for sale in common course of the business;

(ii) in process of production for such sale or

(iii) To be presently consumed in the production of services or goods to be available for sale.

Inventories are held fundamentally to smoothes the operations of the firm. Shortage of inventory at any point would disrupt operations resulting in either perfect time for men and lost or machine sales. A manufacturing firm may have inventories of various stages in the production process.

Posted Date: 4/9/2013 5:32:51 AM | Location : United States

Related Discussions:- Reasons for holding inventory, Assignment Help, Ask Question on Reasons for holding inventory, Get Answer, Expert's Help, Reasons for holding inventory Discussions

Write discussion on Reasons for holding inventory
Your posts are moderated
Related Questions

Write at least 7 full pages that analyzes the internal and external environments for your organization. This paper must be in essay form. [If you have formatting questions, refer t

Generally Accepted Accounting Principles (GAAP) are guidelines for companies to follow as tehy prepare and issue financial statements. Let's start by getting an understanding of wh

Illustration of Admission of a new partner XYZ have been trading as equal partners having capital contributions of £300,000, £250,000 and £200,000 respectively.  They  agreed

Q. Calculate infant mortality rate? Mid year population 440000 Late fatal death          29 No. of live birth           5200 No. of infant death      423 No. of mate

Question: Zelo, Inc. stock has a beta of 1.23. The risk-free rate of return is 4.5% and the market rate of return is 10%. What is the amount of the risk premium on Zelo stock?

Illustrations of Dissolutions X, Y and Z have been trading as partners sharing profits and losses in the ratio of 2:2:1 on the 1st July 2005, they decided to dissolve the partn

On January 1, 2010, Anderson Corporation had 60,000 shares of $1 par value common stock issued and outstanding. During the year, the following transactions occurred: Mar. 1 Issued

Most firms build and keep inventories in the course of doing business. Manufacturing firms hold raw material, finished goods and spares and work in process in inventories. Financia