Overview of Inventory Accounting
Course Info
Code PO1-113
Duration 5 Days
Format Classroom
Course Summary
Controlling your assets and stock through inventory management enables you to optimise your profits, however inventory can be one of the most complex assets to track. Incorporating inventory accounting into your management process can help you adapt to supply chain changes and improve customer satisfaction.
This course is targeted to accounting professionals and provides you with an overview of how inventory accounting is used to track inventory quantities. Understanding how to accurately value inventory on a balance sheet is essential to effectively monitoring inventory.
- Understand the importance of maintaining accurate inventory records.
- Identify ways to improve the accuracy of inventory records and assign costs to inventory.
- Apply strategies and methods to create and maintain a system of inventory accounting and controls.
- Develop a deeper understanding of inventory-specific accounting factors such as spoilage, rework, scrap, transfer pricing, cost layering, and budgeting.
- Describe inventory policies and the maintenance of those policies.
- Accounting Professionals
- Inventory Managers and Supervisors
- Supply Chain Professionals
- Anyone looking to learn more about inventory accounting.
This course uses a variety of adult learning styles to aid full understanding and comprehension.
Participants will review case studies to highlight key areas of importance and possible areas for faults.
They will be supplied with the best tools required to carry out learning exercises to improve their skills. Participants will analyse the examples to gain a thorough understanding of how these skills, techniques and methods apply in the workplace.
Course Content & Outline
- Describe inventory and inventory transactions.
- Outline accounting for inventory management.
- Differentiate between Push and Pull inventory management systems.
- Compare Periodic and Perpetual inventory management systems.
- Describe methods and controls for inventory data collection.
- Interpret inventory review reports.
- Examine common maintenance and data errors in inventory records.
- Identify environmental and personnel factors that impact record accuracy.
- Discuss backflush costing in Just-In-Time inventory systems.
- Review key elements of inventory auditing and corrective action systems.
- Describe the structure and set up of an inventory record system.
- Describe physical inventory count.
- Identify issues and remediation strategies for physical inventory count.
- Review cycle counting in perpetual inventory management.
- Analyse the benefits of using a control group.
- Examine the process of inventory reconciliation.
- Describe the Gross Profit method.
- Describe the Retail Inventory method.
- Explore key concepts of ending inventory.
- Discuss the impacts of overstated ending inventory.
- Describe the standard costing method in perpetual inventory management.
- Discuss historical, attainable, and theoretical standards for costing.
- Identify variances in costing and issues with variance analysis.
- Determine which variances should be reported.
- Describe process costing.
- Describe the weighted average method.
- Describe the First In, First Out (FIFO) method.
- Examine the Hybrid Costing system.
- Review the format for process costing journal entries.
- Identify challenges with process costing.
- Define spoilage, rework, and scrap.
- Describe accounting for normal and abnormal spoilage.
- Outline the cost allocation for spoilage.
- Explain reporting and accounting for rework.
- Summarise accounting for scrap.
- Identify types of inventory transactions.
- Describe inventory adjustments: lower of cost, market, obsolete, physical count, scrap, and spoilage.
- Examine overhead allocation transactions.
- Explore receiving transactions and sales transactions.
- Describe inventory transfer pricing methods: market-based transfer price, adjusted cost basis, negotiated transfer price, and cost plus basis.
- Identify cost anomalies and pricing issues caused by transfer pricing.
- Examine the tax implications of inventory transfer pricing.
- Describe types of inventory policies.
- Examine the Lower of Cost or Market Rule and its impact on policy updates.
- Describe how obsolete inventory updates are handled.
- Discuss Bill and Hold and Collection Take-Back policies.
- Outline a production budget.
- Explore how to budget inventory for multiple products.
- Identify issues with production budgets.
Embark on a journey to optimise HR functions with our guide. From understanding HR assessments to implementing strategic changes, discover the key steps, methods, and tools vital for fostering organisational success through effective human resources management.
Featured Courses
Holistique Training draws distinction as one of the pioneers in the field of training and professional development solutions since 2008.