Project Accounting – Introduction and Value
In the world of accounting, project accounting is a subset of financial accounting. Many folks believe it is a form of cost accounting and it is not.
How is Cost of Goods Sold in Retail Determined?
Each industry is different in determining costs of goods sold or cost of services rendered. Retail uses two distinct methods to calculate costs of goods sold. The first is called ‘Specific Identification’ whereby each item sold is specifically identified to its recorded cost. The second method is referred to as ‘Inventory Adjustment’ format. In this method, a beginning and ending balance is recorded along with the purchases throughout the year. There are many variations of this method when the price paid for the purchase of inventory varies throughout the accounting period. These variations include First In First Out (FIFO), Last In First Out (LIFO) and Average Costing.
How are Cost of Goods Sold in Retail Determined?
Each industry is different in determining costs of goods sold or cost of services rendered. Retail uses two distinct methods to calculate costs of goods sold. The first is called ‘Specific Identification’ whereby each item sold is specifically identified to its recorded cost. The second method is referred to as ‘Inventory Adjustment’ format. In this method, a beginning and ending balance is recorded along with the purchases throughout the year.
Retail Sales: There Are No Rules
First rule: THERE ARE NO RULES! Second rule: WHEN IN DOUBT, REFER TO THE FIRST RULE.