What Is Inventory Accounting? How it might benefit a company?
There is a section in accounting in which the accountants deal with changes in inventoried assets of a company. Here, inventory means all items held by a company such as goods, merchandise, etc. To make it more clear, consider a newspaper vendor using a car in order to deliver items to the customers. In this case, the newspaper is an inventory, and the car is considered an asset. Moreover, inventoried assets refer to goods in three stages of production. The stages are as follows: raw goods, in-progress goods, and finished goods. Inventory accounting will ensure accurate valuation of the items of each stage in order to record them as company assets. This method provides a company with an accurate representation of its financial health.