The First Finance Discussion Thread

Wilso, I'm confused; when you purchase inventory during the accounting period, namely June 30, it's still considered "inventory." When an inventory is taken at the close of business on June 30, the inventory account is adjusted to actual - which includes all purchases up to and including June 30.

It's a little bit fuzzier than that c.i.

You are giving too much definitiveness to words. Much as they do with the "2nd trimester (x months) definition.

It's comforting.

It's about outwitting the taxman who is also an accountant. If he's not an accountant you must have no fiddles going.

I'm only following my text book and instructors. It's not updated when purchases are made during the period. Don't ask me to explain it. A perpetual system is updated constantly.

Perpetual Inventory System

Perpetual inventory system updates inventory accounts after each purchase or sale.
Inventory subsidiary ledger is updated after each transaction.
Inventory quantities are updated continuously.

Periodic Inventory System

Periodic inventory system records inventory purchase or sale in "Purchases" account.
"Purchases" account is updated continuously, however, "Inventory" account is updated on a periodic basis, at the end of each accounting period (e.g., monthly, quarterly)
Inventory subsidiary ledger is not updated after each purchase or sale of inventory.
Inventory quantities are not updated continuously.
Inventory quantities are updated on a periodic basis.

Thanks c.i.

I'll bear it in mind.

You don't understand the "gearing" principle. Tin-openers notwithstanding.

That's how I understand it now. This is a funny subject for me. The first time I read a particular part, or do an exercise, I'm not really understanding it. Then I go away and just think about it for a little while, process the information, and it falls into place. Sometimes it's only taking an hour. Sometimes it's taking a day or two. But at least it's sinking in.

Wilso, After I took Accounting 101, required for all Business majors, I tutored other students and got paid a stipend for it. Teaching others really helped to "sink it into my brain," because I had to teach the same topic in so many different ways, since not all students understand it in the same way.

I majored in Accounting, because I got an "A" in 101. LOL

When I took Accounting 101, we had two full classes of students, but by the time we took Advanced Accounting, there were only three of us left. Accounting is one subject you can't BS your way through it; most Accounting majors end up with a higher grade point average, because their study habits are better. <smile>

This subject had a 39% failure rate last semester.

Let us know what the success rate is for this year?

Got 88% in my mid semester exam this week. Average was 60.

Congrats, Wilso. You done good.

Finished the subject with 89%. High distinction. Results just in this hour.

I'm impressed; good show!

Wilso, I found the study of philosophy also had the same learning process. It helped to walk away for awhile to process the information, and then "bingo!" Interesting, that!