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Financial Terms | |
Inventory |
Information about financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit.
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Definition of InventoryInventoryFor companies: Raw materials, items available for sale or in the process of being made ready for InventoryGoods bought or manufactured for resale but as yet unsold, comprising raw materials, work-in-progress and finished goods. InventoryGoods that a firm stores in anticipation of its later sale or use as an input. InventoryThe cost of the goods that a company has available for resale. InventoryThe cost of unsold goods that are held for sale in the ordinary course of business or InventoryThose items included categorized as either raw materials, work-inprocess,
Related Terms:ABC inventory classificationA method for dividing inventory into classifications, Average-Cost Inventory MethodThe inventory cost-flow assumption that assigns the average ![]() Average inventoryThe beginning inventory for a period, plus the amount at the end of Blanket inventory lienA secured loan that gives the lender a lien against all the borrower's inventories. Book inventoryThe amount of money invested in inventory, as per a company’s Days' sales in inventory ratioThe average number of days' worth of sales that is held in inventory. Distribution inventoryinventory intended for shipment to customers, usually dollar days (of inventory)a measurement of the value of inventory for the time that inventory is held Ending inventoryThe dollar value or unit total of goods on hand at the end of an Finished goods inventoryGoods that have been completed by the manufacturing Finished goods inventoryCompleted inventory items ready for shipment to ![]() First-In, First-Out (FIFO) Inventory MethodThe inventory cost-flow assumption that Fluctuation inventoryExcess inventory kept on hand to provide a buffer against Hedge inventoryExcess inventories kept on hand as a buffer against contingent In-transit inventoryinventory currently situated between its shipment and delivery Inactive inventoryParts with no recent prior or forecasted usage. Inventory adjustmentA transaction used to adjust the book balance of an inventory Inventory DaysThe number of days it would take to sell the ending balance in inventory at the Inventory diversionThe redirection of parts or finished goods away from their intended Inventory issueA transaction used to record the reduction in inventory from a location, Inventory loanA secured short-term loan to purchase inventory. The three basic forms are a blanket Inventory receiptThe arrival of an inventory delivery from a supplier or other Inventory returnsinventory returned from a customer for any reason. This receipt inventory shrinkageA term describing the loss of products from inventory Inventory ShrinkageA shortfall between inventory based on actual physical counts and inventory Inventory turnoverThe ratio of annual sales to average inventory which measures the speed that inventory INVENTORY TURNOVERThe number of times a company sold out and replaced its average stock of goods in a year. The formula is: Inventory turnoverThe number of times per year that an entire inventory or a Inventory TurnoverRatio of annual sales to inventory, which shows how many times the inventory of a firm is sold and replaced during an accounting period. inventory turnover ratioThe cost-of-goods-sold expense for a given Inventory Turnover RatioProvides a measure of how often a company's inventory is sold or inventory write-downRefers to making an entry, usually at the close of a Just-in-time inventory systemsSystems that schedule materials/inventory to arrive exactly as they are Last-In, First-Out (LIFO) Inventory MethodThe inventory cost-flow assumption that assigns the most recent inventory acquisition costs to cost of goods sold. The earliest inventory Maximum inventoryAn inventory item’s budgeted maximum inventory level, MERCHANDISE INVENTORYThe value of the products that a retailing or wholesaling company intends to resell for a profit. Minimum inventoryAn inventory item’s budgeted minimum inventory level. Moving average inventory methodAn inventory costing methodology that calls for the re-calculation of the average cost of all parts in stock after every purchase. Net inventoryThe current inventory balance, less allocated or reserved items. Obsolete inventoryParts not used in any current end product. Periodic inventoryA physical inventory count taken on a repetitive basis. Periodic inventory systemAn inventory system in which the balance in the inventory account is adjusted for the units sold only at the end of the period. Perpetual inventoryA system that continually tracks all additions to and deletions Perpetual inventoryA manual or automated inventory tracking system in which Perpetual inventory systemAn inventory system in which the balance in the inventory account is adjusted for the units sold each time a sale is made. Physical inventoryA manual count of the on-hand inventory. Raw materials inventoryThe total cost of all component parts currently in stock that Reconciling inventoryThe process of comparing book to actual inventory balances, Seasonal inventoryVery high inventory levels built up in anticipation of large Surplus inventoryParts for which the on-hand quantity exceeds forecasted vendor-managed inventorya streamlined system of inventory Vendor-managed inventoryThe direct management and ownership of selected Work-in-process inventoryinventory that has been partially converted through the ACID-TEST RATIOA ratio that shows how well a company could pay its current debts using only its most liquid or “quick” assets. It’s a more pessimistic—but also realistic—measure of safety than the current ratio, because it ignores sluggish, hard-toliquidate current assets like inventory and notes receivable. Here’s the formula: actual cost systema valuation method that uses actual direct applied overheadthe amount of overhead that has been assigned to Work in Process inventory as a result of productive activity; credits for this amount are to an overhead account Back flushThe subsequent subtraction from inventory records of those parts used backflush costinga streamlined cost accounting method that speeds up, simplifies, and reduces accounting effort in an environment that minimizes inventory balances, requires Bin transferA transaction to move inventory from one storage bin to another. Blend offThe reintroduction of a faulty product into a process production flow by carrying costthe total variable cost of carrying one unit of Carrying costThe cost of holding inventory, which can include insurance, Cash conversion cycleThe length of time between a firm's purchase of inventory and the receipt of cash Cash Flow Provided by Operating ActivitiesWith some exceptions, the cash effects of transactions Change in Accounting EstimateA change in the implementation of an existing accounting cost of goods manufactured (CGM)the total cost of the Current assetTypically the cash, accounts receivable, and inventory accounts on the Current assetsCash, things that will be converted into cash within a year (such as accounts receivable), and inventory. Current assetsAmounts receivable by the business within a period of 12 months, including bank, debtors, inventory and prepayments. Cycle countingThe frequent, scheduled counting of a subset of all inventories, Days StatisticsMeasures the number days' worth of sales in accounts receivable (accounts receivable Departmental stocksThe informal and frequently unauthorized retention of excess inventory on the shop floor, which is used as buffer safety stock. Earmarked materialinventory that has been physically marked as being for a economic order quantityOrder size that minimizes total inventory costs. Economic order quantity (EOQ)The order quantity that minimizes total inventory costs. economic order quantity (EOQ)an estimate of the number economic production run (EPR)an estimate of the number FIFO (First In, First Out)An inventory valuation method that presumes that the first units received were the first ones FIFO method (of process costing)the method of cost assignment that computes an average cost per equivalent Financial yearThe accounting period adopted by a business for the production of its financial statements. First in, first-out costing method (FIFO)A process costing methodology that assigns the earliest First-In-First-Out (FIFO)A method of valuing the cost of goods sold that uses the cost of the oldest item in First-in, first-out (FIFO)A method of accounting for inventory. First-in, first-out (FIFO)An inventory valuation method under which one assumes that the Fixed-location storageAn inventory storage technique under which permanent Floor planningArrangement used to finance inventory. A finance company buys the inventory, which is then Floor stocksLow-cost, high-usage inventory items stored near the shop floor, idle timethe amount of time spent in storing inventory or internal accounting controlsRefers to forms used and procedures Interplant transferThe movement of inventory from one company location to job order cost sheeta source document that provides virtually just-in-time manufacturing systema production system that attempts to acquire components and produce inventory only as needed, to minimize product defects, and to Last-In-First-Out (LIFO)A method of valuing inventory that uses the cost of the most recent item in Last-in, first-out (LIFO)An inventory costing methodology that bases the recognized cost of Related to : financial, finance, business, accounting, payroll, inventory, investment, money, inventory control, stock trading, financial advisor, tax advisor, credit. |