Inventory: Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business. Periodic Inventory System: In periodic inventory system, the changes in the stock items are reported periodically unlike recording as and when purchases or sales take place. Weighted Average Cost Method: In this method, the weighted average cost is evaluated after any purchases have been made and transactions are recorded as when purchase or sales take place. Costs assigned to the ending inventory under periodic inventory system by applying weighted average method.

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Chapter 5, Problem 17QS

To determine

Inventory:

Inventory refers to the stock or goods which will be sold in the near future and thus is an asset for the company. It comprises of the raw materials which are yet to be processed, the stock which is still going through the process of production and it also includes completed products that are ready for sale. Thus inventory is the biggest and the important source of income and profit for the business.

Periodic Inventory System:

In periodic inventory system, the changes in the stock items are reported periodically unlike recording as and when purchases or sales take place.

Weighted Average Cost Method:

In this method, the weighted average cost is evaluated after any purchases have been made and transactions are recorded as when purchase or sales take place.

Costs assigned to the ending inventory under periodic inventory system by applying weighted average method.

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