Overview
AW complete week 4
https://learn.devry.edu
D41265376
Part 1
Week 4: Quiz
Week 4: Case Study
Week 4: Homework
Part 2 complete discussion
If you were starting a new business, would you have a business based on inventory only, services provided only or a combination? Summarize the advantages and disadvantages
Part 3 complete discussion
Can a grocery store use the LIFO method? Why and why not? When would FIFO be used by a grocery store?
Part 4 reply
Group 6
Inventory is different from other types of assets primarily because it is held for the purpose of sale or production, rather than long term use or investment. Unlike fixed assets like buildings and machinery, which are used in operations over time, inventory is consumed or sold in the normal course of business. For example, a clothing retailer holds shirts and jeans as inventory to sell to customers. The inventory is held for resale or for use in producing goods to sell. A warehouse used to store inventory is a fixed asset not inventory. Other assets would include equipment or land, are used to support operations but are not for sale. Inventory is a current asset, expected to be sold or consumed within a year or the operating cycle, whichever is longer. Other assets may be current such as cash, accounts receivable or noncurrent which includes property, plant and equipment. The types of Inventories would be raw materials which are basic inputs used in the production process. Examples would be cotton used by textile company. Another type would be finished goods which are completed products ready for sale. An example would be a fully assembled smartphone in a store. Inventory has a higher turnover rate compared to non-current assets. It is expected to be sold quickly to generate revenue. other assets, like equipment, are less liquid, as they are not easily converted into cash without affecting operations. Inventory requires specific accounting methods like FIFO and LIFO to track costs. Other assets are typically depreciated over time, reflecting wear and usage rather than cost of goods sold.
Part 5 reply
The operating cycle is affected by how long it takes to sell products and collect money. It includes buying inventory, selling goods, and getting paid. Faster sales and quick payments make the cycle shorter. Slow customer payments make the cycle longer. The accounting cycle is different because it tracks all financial steps in a time period. It includes recording, adjusting, and closing entries. The operating cycle focuses on the flow of business, while the accounting cycle focuses on financial records.
The operating cycle involves buying inventory, selling products, and collecting payments, for example, a store selling shirts in 30 days and collecting payment in 20 days has a 50-day cycle. The accounting cycle tracks financial records like sales and expenses