"Accounting for Inventory1"
Accounting for Inventory Inventory is stock or merchandise that a company purchases in order to sell to a consumer to make a profit. Supermarkets and retail outlets purchase stock from varies suppliers in order to sell it back to consumers for the sole purpose of making a profit. Learn how business entities account for inventory. Understand how to record the purchase and sale of inventory on credit. Record purchase and sale returns. Account for stock loss and stock gain. Use stock cards and stock control accounts to keep an accurate record of inventory on hand. Accurately record the true value of inventory on hand by using the lower of cost price or net realise value.