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Assortment strategies are used by retailers in brick-and-mortar and ecommerce to decide on a daily basis how to allocate inventory to their stores as part of their merchandise planning processes. Such strategies are integral for retailers because they directly affect how their customers interact with their merchandise, and therefore, their brand.
For example, organizations in the U.S. define inventory to suit their needs within US Generally Accepted Accounting Practices (GAAP), the rules defined by the Financial Accounting Standards Board (FASB) (and others) and enforced by the U.S. Securities and Exchange Commission (SEC) and other federal and state agencies. Other countries often have ...
A company might use the LIFO method for accounting purposes, even if it uses FIFO for inventory management purposes (i.e., for the actual storage, shelving, and sale of its merchandise). For example, a company that sells many perishable goods, such as a supermarket chain, is likely to follow the FIFO method when managing inventory, to ensure ...
An example illustrates why. Fred buys auto parts and resells them. In 2008, Fred buys $100 worth of parts. He sells parts for $80 that he bought for $30, and has $70 worth of parts left. In 2009, he sells the remainder of the parts for $180. If he keeps track of inventory, his profit in 2008 is $50, and his profit in 2009 is $110, or $160 in total.
In accounting, the inventory turnover is a measure of the number of times inventory is sold or used in a time period such as a year. It is calculated to see if a business has an excessive inventory in comparison to its sales level. The equation for inventory turnover equals the cost of goods sold divided by the average inventory.
Inventory control or stock control can be broadly ... for example. Reports could be ... and profiting off merchandise or services. [2] Inventory control is the ...
Two very popular methods are 1)- retail inventory method, and 2)- gross profit (or gross margin) method. The retail inventory method uses a cost to retail price ratio. The physical inventory is valued at retail, and it is multiplied by the cost ratio (or percentage) to determine the estimated cost of the ending inventory.
General Journal - Merchandise return example Date Description of entry Debit Credit 8-7 Sales returns and allowances 20.00 Accounts receivable 20.00 Full credit for customer return of merchandise purchased on account. 8-7 Inventory 15.00 Cost of goods sold 15.00 Restore returned merchandise to inventory.