Introduction to Inventory

Question 1

Can inventories be non-current assets to the seller?

Answer 1

-No never

Question 2

How do you determine what items are included in inventory?

Answer 2

-Apply ownership criteria

Question 3

Is interest on purchase or construction of inventory included in inventory?

Answer 3

-No never

Question 4

How are fixed overhead that hasn’t benefited production and idle facility expense, excessive spoilage, double freight, wasted materials, and rehandling costs treated?

Answer 4

-As current period expenses not allocated to product