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Course Details

Accounting for Inventory - Second Edition (Course Id 872)

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Author : Steven Bragg, CPA
Status : Production
CPE Credits : 13.0
IRS Credits : 0
Price : $112.95
Passing Score : 70%
Primary Subject-Field Of Study:

Accounting - Accounting and Auditing for Course Id 872

Description :

Inventory often represents a company’s largest investment. As a result, management expects the accounting staff to provide thorough, timely information about its status. To meet this expectation, Accounting for Inventory presents every issue that the accountant might need to create and maintain a comprehensive system of inventory accounting. Topics covered include inventory counting systems, cost layering, standard costing, overhead allocation, the lower of cost or market rule, disclosures, transfer pricing, budgeting, measurements, and much more. The course is designed to be a beginning-to-end overview of inventory.

Usage Rank : 0
Release : 2015
Version : 1.0
Prerequisites : None
Experience Level : Overview
Additional Contents : Complete, no additional material needed
Additional Links :
Advance Preparation : None
Delivery Method : Self-Study
Intended Participants : Anyone needing Continuing Professional Education (CPE)
Revision Date : 04-Nov-2015
NASBA Course Declaration : Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam.
Approved Audience :

NASBA QAS - NASBA Registry - 872

Keywords : Accounting, Accounting, Inventory, Second, Edition, cpe, cpa, online course
Learning Objectives :

Course Learning Objectives

    • Cite the types of inventory and recognize the timing of inventory ownership.
    • Note the situations in which the periodic inventory system should be used, and how the perpetual system can be enhanced.
    • Identify the situations that can cause incorrect inventory transactions.
    • Recognize the activities needed to establish a system of inventory record keeping, and how such a system may be rendered less accurate.
    • Estimate ending inventory using the retail method.
    • Cite the contents and calculation methods used for all systems of cost layering.
    • Recognize the calculation methods for and causes of variances from standard costs.
    • Identify the accounting for and uses of a job costing system.
    • Note the calculation methods and inputs needed to operate a process costing system.
    • Note the contents of and controls over the use of overhead.
    • Identify who is responsible for spotting obsolete inventory, as well as the methods used to account for it.
    • Recognize the cost classifications used in the lower of cost or market rule.
    • Note the accounting for spoilage, scrap, and rework.
    • Identify the methods of allocation for joint costs and by-products.
    • Recognize the disclosures associated with inventory.
    • Identify the contents of the various accounting entries needed to record inventory transactions.
    • Cite the rules promulgated by the Internal Revenue Service that relate to inventory.
    • Itemize the pricing methods that can be used to compile transfer prices between subsidiaries, as well as the issues associated with each one.
    • Cite the controls that can be used in the purchasing, receiving, and shipping of inventory.
    • Note the kinds of inventory-related activities that can be fraudulently employed to alter financial results or steal assets.
    • Identify those policies that can be used to support accounting transactions related to inventory.
    • Recognize the calculation methods used for the various budgets that include inventory, as well as the issues to consider when constructing these budgets.
    • Note how the results of various inventory measurements can be interpreted, when these measurements should be used, and the types of behavior they can reinforce.

Chapter 1
Overview of Inventory

Cite the types of inventory and recognize the timing of inventory ownership.

Chapter 2
Periodic and Perpetual Inventory Systems

Note the situations in which the periodic and perpetual inventory systems should be used, and how the perpetual system can be enhanced.

Chapter 3
Inventory Record Accuracy

Identify the situations that can cause incorrect inventory transactions.

Chapter 4
Inventory Counting and Reconciliation

Recognize the activities needed to establish a system of inventory record keeping, and how such a system may be rendered less accurate.

Chapter 5
Estimating Ending Inventory

Estimate ending inventory using the retail method.

Chapter 6
Inventory Cost Layering

Cite the contents and calculation methods used for all systems of cost layering.

Chapter 7
Standard Costing of Inventory

Recognize the calculation methods for and causes of variances from standard costs.

Chapter 8
Job Costing

Identify the accounting for and uses of a job costing system.

Chapter 9
Process Costing

Note the calculation methods and inputs needed to operate a process costing system.

Chapter 10
Overhead Allocation

Note the contents of and controls over the use of overhead.

Chapter 11
Obsolete Inventory

Identify who is responsible for spotting obsolete inventory, as well as the methods used to account for it.

Chapter 12
Lower of Cost or Market Rule

Recognize the cost classifications used in the lower of cost or market rule.

Chapter 13
Inventory Spoilage, Rework, and Scrap

Note the accounting for spoilage, scrap, and rework.

Chapter 14
Joint and By-Product Costing

Identify the methods of allocation for joint costs and by-products.

Chapter 15
Inventory Disclosures

Recognize the disclosures associated with inventory.

Chapter 16
Inventory Transactions

Identify the contents of the various accounting entries needed to record inventory transactions.

Chapter 17
Internal Revenue Code for Inventory

Cite the rules promulgated by the Internal Revenue Service that relate to inventory.

Chapter 18
Inventory Transfer Pricing

Itemize the pricing methods that can be used to compile transfer prices between subsidiaries, as well as the issues associated with each one.

Chapter 19
Inventory Controls

Cite the controls that can be used in the purchasing, receiving, and shipping of inventory.

Chapter 20
Fraudulent Inventory Transactions

Note the kinds of inventory-related activities that can be fraudulently employed to alter financial results or steal assets.

Chapter 21
Inventory Policies

Identify those policies that can be used to support accounting transactions related to inventory.

Chapter 22
Inventory Budgeting

Recognize the calculation methods used for the various budgets that include inventory, as well as the issues to consider when constructing these budgets.

Chapter 23
Inventory Measurements

Note how the results of various inventory measurements can be interpreted, when these measurements should be used, and the types of behavior they can reinforce.
Course Contents :

Chapter 1 - Overview of Inventory

The Definition of Inventory

Accounting for Inventory

Inventory Transactions

Inventory Flow in a Push Environment

Inventory Flow in a Pull Environment

Chapter 2 - Periodic and Perpetual Inventory Systems

The Periodic Inventory System

The Perpetual Inventory System

Summary

Chapter 3 - Inventory Record Accuracy

Inventory Record Errors

Environmental Factors Impacting Record Accuracy

Employee Factors Impacting Record Accuracy

Labeling Issues Impacting Record Accuracy

Inventory Naming Conventions Impacting Record Accuracy

Excessive Data Recordation

Inventory Data Collection Methods

The Data Entry Backlog Problem

Back Flushing

Controls over Record Accuracy

Inventory Review Reports

The Negative Inventory Balance

Inventory Auditing

The Corrective Action System

Chapter 4 - Inventory Counting and Reconciliation

How to Set Up Inventory Record Keeping

The Physical Inventory Count

Concerns about the Physical Inventory Count

Physical Count Improvements

Cycle Counting

Control Group Analysis

100% Count Analysis

Inventory Reconciliation

Chapter 5 - Estimating Ending Inventory

The Gross Profit Method

The Retail Inventory Method

The Effect of Overstated Ending Inventory

Chapter 6 - Inventory Cost Layering

Inventory Costing

The First in, First Out Method

The Last in, First Out Method

The Dollar-Value LIFO Method

The Link-Chain Method

The Weighted Average Method

The Specific Identification Method

Chapter 7 - Standard Costing of Inventory

Overview of Standard Costing

How to Create a Standard Cost

Historical, Attainable, and Theoretical Standards

How to Account for Standard Costs

Overview of Variances

The Purchase Price Variance

Material Yield Variance

Labor Rate Variance

Labor Efficiency Variance

Variable Overhead Spending Variance

Variable Overhead Efficiency Variance

Fixed Overhead Spending Variance

Problems with Variance Analysis

The Controllable Variance

The Favorable or Unfavorable Variance

Where to Record a Variance

Which Variances to Report

How to Report Variances

Chapter 8 - Job Costing

Overview of Job Costing

When Not to Use Job Costing

Accounting for Direct Materials in Job Costing

Accounting for Labor in Job Costing

Accounting for Actual Overhead Costs in Job Costing

Accounting for Standard Overhead Costs in Job Costing

The Importance of Closing a Job

The Role of the Subsidiary Ledger in Job Costing

Chapter 9 - Process Costing

Overview of Process Costing

The Weighted Average Method

The Standard Costing Method

The First In, First Out Method

The Hybrid Costing System

Process Costing Journal Entries

Problems With Process Costing

Chapter 10 - Overhead Allocation

Overhead Allocation

Averaging of Overhead Rates

Chapter 11 - Obsolete Inventory

Expected Dispositions Method

Reserve Method

Expensing Method

Issues with Obsolete Inventory Recognition

Chapter 12 - Lower of Cost or Market Rule

Lower of Cost or Market Rule

Inventory Translation Adjustment

Practical Application

Chapter 13 - Inventory Spoilage, Rework, and Scrap

Definition of Spoilage

Accounting for Normal Spoilage

Accounting for Abnormal Spoilage

Accounting for the Sale of Spoilage

Cost Allocation to Spoilage

Definition of Rework

Reporting Rework

Accounting for Rework

Definition of Scrap

Accounting for Scrap

Chapter 14 - Joint and By-Product Costing

Split-Off Points and By-Products

Why We Allocate Joint Costs

Joint Cost Allocation

Joint Product and By-Product Pricing

Special Concerns With By-Product Costing

Chapter 15 - Inventory Disclosures

Inventory Disclosures

Chapter 16 - Inventory Transactions

Initial Cost Recognition

Acquired Inventory Transactions

Backflushing Transactions

Bill and Hold Transactions

Consignment Transactions

Cross Docking Transactions

Drop Shipping Transactions

Engineering Change Order Transactions

Goods in Transit Transactions

Kitting Transactions

Lower of Cost or Market Adjustments

Obsolete Inventory Adjustments

Overhead Allocation Transactions

Physical Count Adjustments

Receiving Transactions

Sale Transactions

Scrap and Spoilage Adjustments

Chapter 17 - Internal Revenue Code for Inventory

IRC Section 471 – General Rule for Inventories

IRC Section 472 – Last In, First Out Inventories

IRC Section 473 – Qualified Liquidations of LIFO Inventories

IRC Section 474 – Simplified Dollar-Value LIFO Method

IRC Section 1504(a) – Affiliated Group

Chapter 18 - Inventory Transfer Pricing

Overview of Transfer Pricing

Market Price Basis for Transfer Pricing

Adjusted Market Price Basis for Transfer Pricing

Negotiated Basis for Transfer Pricing

Contribution Margin Basis for Transfer Pricing

Cost Plus Basis for Transfer Pricing

Cost Anomalies in a Cost-Based Transfer Price

Pricing Problems Caused by Transfer Pricing

The Tax Impact of Transfer Prices

Chapter 19 - Inventory Controls

Purchasing Process Overview

In-Process Purchasing Controls

Additional Purchasing Controls – Fraud Related

Additional Purchasing Controls – Periodic Actions

Receiving Process Overview

In-Process Receiving Controls

Additional Receiving Controls – Fraud Related

Additional Receiving Controls – Periodic Actions

Shipping Process Overview

In-Process Shipping Controls

Additional Shipping Controls – Fraud Related

Additional Shipping Controls – Periodic Actions

Intercompany Controls

Inventory Valuation Controls

Warehouse Controls

Production Controls

Chapter 20 - Fraudulent Inventory Transactions

Those Who Commit Fraud

Financial Statement Fraud – Labor Component

Financial Statement Fraud – Materials Component

Financial Statement Fraud – Overhead Component

Revenue Fraud

Inventory Theft

Common Fraud Risk Factors

Fraud Prevention Tactics

Chapter 21 - Inventory Policies

Inventory Policies

Receiving Policy

Point of Ownership Policy

Responsibility for Inventory Policy

Inventory Access Policy

Inventory Owned by Third Parties Policy

Consigned Inventory Identification Policy

Physical Count Policy

Cycle Counting Policy

Inventory Record Access Policy

Bill of Material Updates Policy

Standard Costing Updates Policy

Lower of Cost or Market Updates

Obsolete Inventory Updates

Bill and Hold Policy

Collections Take-Back Policy

Chapter 22 - Inventory Budgeting

The Production Budget

Other Production Budget Issues

Budgeting for Multiple Products

Ending Inventory Concepts

Impact of Changes in Ending Inventory

The Ending Finished Goods Inventory Budget

Direct Materials Budgeting Overview

The Direct Materials Budget (Roll up Method)

The Direct Materials Budget (Historical Method)

The Direct Materials Budget (80/20 Method)

Anomalies in the Direct Materials Budget

The Role of the Direct Materials Budget

Chapter 23 - Inventory Measurements

Overview of Inventory Measurements

Average Inventory Calculation

Inventory Turnover Measurements

Inventory Turnover Ratio

Raw Materials Turnover

Work-in-Process Turnover

Finished Goods Turnover

Inventory Accuracy Percentage

Excess Inventory Measurements

Obsolete Inventory Percentage

Percent of Inventory Greater than XX Days

Returnable Inventory Valuation

Opportunity Cost of Excess Inventory

Glossary

Accounting Course 872 Home: https://www.cpethink.com/accounting-cpa-courses
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