Ending Inventory refers to the stock held by a business at the end of a financial period. It plays a crucial role in calculating the Cost of Goods Sold (COGS) on the Profit and Loss statement, as well as appearing on the Balance Sheet.
Inventory accounting refers to the accounting records and systems used for the ordering, receipt, issuing, and valuation of materials bought by an organization for stock. It includes the recording of entries on bin cards and in the stock ledger as well as the procedures adopted to carry out effective stocktaking.
An inventory certificate is a management representation to an independent auditor regarding the inventory balance on hand. It typically details the method used in computing inventory quantity, pricing basis, and condition.
Net Realizable Value (NRV) is a key metric in inventory accounting that measures the estimated amount a business expects to receive from the sale of inventory, minus any estimated costs to complete the sale.
An accounting process used to determine the cost of inventory sold or put into production. Data on beginning inventory, purchases, and ending inventory are used to find the amount and cost of withdrawals from inventory.
