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When most people go to college they think of what major would be the most interesting,
and most exciting. However there are a few brave souls who want to be bored out of their
mind but learn the language of business. For those few the major of accounting calls to
them. Those men and women who choose accounting as their major will spend many
semesters trying to figure out what the hell the professors are talking about when they go
into managing and valuing inventories for companies. This one area of accounting is one
of the most important parts to understand, because of the vast amounts of money
companies have raped up in inventories. So sit back and get ready to be bored because we
are entering the world of accounting.
Inventories are asset items held for sale in the ordinary course of business or good that will
be used or consumed in the production of goods to be sold. That sounds very interesting
doesnt it? Well let think about that for a second. Companies like Wal-Mart have billions of
dollars put into inventories and they need to make sure that it is properly accounted for so
they do not become the next ENRON of the world. Wal-Mart gets their inventory in a
ready to sell state. That means no extra cost goes into getting it ready to put on the shelf.
