Inventory

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Does anyone remember the inventory question on the afternoon section that had to do with a good that was manufactured made but not sold? I dont remember seeing anything about that in Schweser.
 
I took it as any asset that is meant to be sold to customers is always inventory, regardless. The long term assets are there to support business operations.
 
i took it the same way- a good that is made but not sold... isn't that exactly what inventory is?
 
i agree with you guys.

what about the question asking about an asset the company owned but not for purpose of operations? which account it should belong to??
 
Ya, but bannisja this did not seem like something in the usual operation of their business. It's like you are a distributor of pineapples, and one of your delivery truck breaks down, and you fix it and put it on sale because you decided to get a new model truck. Although it is for sale, but it is not your usual business! I was not sure on that one, so I put "inventory if less than one year", but I have my doubts on my pick for this question!

bannisja Wrote:
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> i took it the same way- a good that is made but
> not sold... isn't that exactly what inventory is?
 
guhongying Wrote:
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> i agree with you guys.
>
> what about the question asking about an asset the
> company owned but not for purpose of operations?
> which account it should belong to??

is that the one about some company buying some land for speculative reasons? cant remember exactly what it was asking... if so, I chose investment.



Edited 1 time(s). Last edit at Monday, June 4, 2007 at 11:25AM by oagra.
 
I also call the land a long term investment due to the speculative reasons.
 
I remembered that there is a word in this question as "RESALE", I didn't understand why did they use this word. I put in inventory as well.
 
I think my answer is: it is inventory, although it has got more than one year's life. Who with me
 
I put it as inventory.......

Reason is, it was manufactured to be resold... which is the primary factor.
 
should it only be classified as inventory if it is supposed to be sold within the year (hence being a CURRENT ASSET)?
 
WOW - come on people - why do LIFO companies report way lower inventories. did i really just read this thread?
 
well think about it, if your confusing whether a good that was manufactured and not sold is a fricking lt asset, investment or inventory thats borderline embarrasing and ridiculous.
 
wow, you're a real gem, countryboy. Too bad you weren't around more this year...
 
i remember having seen "finished goods inventory" in my accounting courses.. isn't it the same thing?
 
bhaiyyu Wrote:
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> i remember having seen "finished goods inventory"
> in my accounting courses.. isn't it the same
> thing?

Just studied some FSA chapters.
Here is what I think for all the question here.
Manufactured goods should be inventory.
Speculative land purchase should be long term investment because not used in operation.
LIFO record lower inventory because unit price increases. So COGS is higher and inventory is lower, earning is lower. Work capital is lower due to tax.
 
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