Assalamualaikum and good evening…
Now I would like to continue with inventory. Do you know what is inventory? When you hear the word inventory, what you imagine. Actually inventory is the entire stock of a business, including materials and finished product. It like a complete list of items such as goods in store.
There has 3 types of inventory :
1- Raw material
Includes all materials before they are placed into production.
2- Work-in-process
Manufactured products that are only partially completed at the date when the balance sheet is prepared.
3- Finished-goods
Manufactured goods that are complete and ready to sale.
We need to know these type of inventory when constructing balance sheet. We need to classified it and record the ending inventory according with their type on balance sheet.
Example :
Partial Balance sheet
Current asset
Raw materials xxx
Work in progress xxx
Finished goods xxx
ECONSfun 