Accounting for Inventory

13 Credits: Accounting


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Accounting for Inventory

Course Level
CPE Credits

13 Credits: Accounting

Course Description

Inventory management in accounting is a complex and critical area, where inaccuracies can significantly impact financial statements. This comprehensive course tackles the challenges accountants face in maintaining precise inventory records. From understanding different inventory types and ownership timings to implementing accurate record-keeping systems and dealing with variances from standard costs, this course covers every facet of inventory accounting. It also delves into issues like obsolete inventory, cost classifications, fraud detection, and IRS rules related to inventory. The course offers practical solutions to enhance the accuracy of inventory accounting, helping accountants avoid major misstatements and maintain integrity in financial reporting. By the end of this course, participants will be equipped with the knowledge to create and maintain a robust inventory accounting system, essential for accurate financial statements.

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Learning Objectives

Upon successful completion of this course, participants will be able to:

Chapter 1

  • Identify the types of inventory and recognize the timing of inventory ownership.

Chapter 2

  • Specify the situations in which the periodic and perpetual inventory systems should be used, and how the perpetual system can be enhanced.

Chapter 3

  • Identify the situations that can cause incorrect inventory transactions.

Chapter 4

  • Recognize the activities needed to establish a system of inventory record keeping, and how such a system may be rendered less accurate.

Chapter 5

  • Estimate ending inventory using the retail method.

Chapter 6

  • Identify the contents and calculation methods used for all systems of cost layering.

Chapter 7

  • Recognize the calculation methods for and causes of variances from standard costs.

Chapter 8

  • Identify the accounting for and uses of a job costing system.

Chapter 9

  • Specify the calculation methods and inputs needed to operate a process costing system.

Chapter 10

  • Specify the contents of and controls over the use of overhead.

Chapter 11

  • Identify who is responsible for spotting obsolete inventory, as well as the methods used to account for it.

Chapter 12

  • Recognize the cost classifications used in the lower of cost or market rule.

Chapter 13

  • Specify the accounting for spoilage, scrap, and rework.

Chapter 14

  • Identify the methods of allocation for joint costs and by-products.

Chapter 15

  • Recognize the disclosures associated with inventory.

Chapter 16

  • Identify the contents of the various accounting entries needed to record inventory transactions.

Chapter 17

  • Identify the rules promulgated by the Internal Revenue Service that relate to inventory.

Chapter 18

  • Itemize the pricing methods that can be used to compile transfer prices between subsidiaries, as well as the issues associated with each one.

Chapter 19

  • Identify the controls that can be used in the purchasing, receiving, and shipping of inventory.

Chapter 20

  • Specify the kinds of inventory-related activities that can be fraudulently employed to alter financial results or steal assets.

Chapter 21

  • Identify those policies that can be used to support accounting transactions related to inventory.

Chapter 22

  • Recognize the calculation methods used for the various budgets that include inventory, as well as the issues to consider when constructing these budgets.

Chapter 23

  • Specify how the results of various inventory measurements can be interpreted, when these measurements should be used, and the types of behavior they can reinforce.
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Course Specifics

Course ID
Revision Date
September 15, 2022

There are no prerequisites

Advanced Preparation


Number of Pages

Compliance Information

NASBA Provider Number: 103220

CMA Notice: Western CPE makes every attempt to maintain our CMA CPE library, to ensure a course meets your continuing education requirements please visit Insitute of Management Accountants (IMA)

CFP Notice: Not all courses that qualify for CFP® credit are registered by Western CPE. If a course does not have a CFP registration number in the compliance section, the continuing education will need to be individually reported with the CFP Board. For more information on the reporting process, required documentation, processing fee, etc., contact the CFP Board. CFP Professionals must take each course in it’s entirety, the CFP Board DOES NOT accept partial credits for courses.

Meet The Experts

Steven M. Bragg, CPA, is a full-time book and course author who has written more than 300 business books and courses. He provides Western CPE with self-study courses in the areas of accounting and finance, with an emphasis on the practical application of accounting standards and management techniques. A sampling of his courses include the The New Controller Guidebook, The GAAP Guidebook, Accountants’ Guidebook, and Closing the Books: An Accountant’s Guide. He also manages the Accounting Best Practices podcast. Steven has been the CFO or controller of both public and private companies and has been a consulting manager with Ernst & Young and …