Category Archives: 1.03 Inventory

Inefficiencies in production

Inefficiencies in production are in reality treated differently. There are companies who don’t even know that they’re being inefficient, there are companies who consider inefficiencies as a part of the everyday process and those who treat inefficiencies as something very serious and fight against them.  Continue reading

Reporting inventories on statement of cash flows

Reporting your inventories on statement of cash flows is virtually always done under operating activities cash flows. When you think about it, what are operating cash flows in essence? They’re meant to show the flows your business is able to generate from its operations, from its day-to-day activities. So it’s safe to say that inventories are something that fall under this category pretty clearly.  Continue reading

Accounting when producing

Accounting entries when you’re dealing with producing your goods are something that needs to be similar throughout.  You have to have specific and pretty detailed accounting laid out – accounts, procedures and controls for measurement (i.e. to measure your own cost per unit).  Continue reading

Producing

When we’re talking about goods, we can either talk about purchasing or producing them. Purchasing is a process where you buy something and resell the item to your customer with adding no or little value to the item. Producing however means that you buy materials and your produce an item out of those materials buy putting them together, changing them into specified forms etc.  Continue reading

Transportation and handling

Unless you’re bringing the goods to your premises by foot, that is by your own foot, you’re bound to encounter some sort of transportation expenses – whether it’s someone else’s service you’re using or your own transportation which depreciates and uses fuels, thus creating expenses. The same way you’re likely to encounter handling expenses when storage spaces are used in-between transports or the goods require special treatment (i.e. special packaging).  Continue reading

Non-refundable taxes and duties

As you purchase goods, whether they’re materials or finished items, you’re paying for various things – the base price of the item, possible enhancements made, taxes on import, purchase etc., transportation and handling, and not to forget, possible rebates or reduction in prices as well.  Continue reading