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CPT Chapter Inventories

CA CPT chapter “Inventories” deals with the different methods of valuing the cost of inventories and the determination of the Gross Profit margin. Valuation of inventories is critical since it can affect the profits of the organization as also its assets position.The chapter also looks at the intricacies in physical counting of stock.

CA CPT Exam  

With Sheela Warrier.Duration:3hrs 25min 

Inventory Duration (min:sec)
Introduction to Inventory 
Introduction01:16
Index02:31
Terminology08:12
Business Flow02:47
Types of Inventory14:39
Relevance of Inventory Valuation 
Relevance of Inventory Valuation02:26
Matching concept10:23
Increase Decrease03:56
Equation06:08
Gross Profit Margin12:03
Example of Equation & GP margin04:55
Summary03:24
End Relevance of Inventory Valuation
Quiz111:42
Basis of Inventory Valuation 
Basis of Inventory Valuation06:30
Purchase Cost10:06
Methods of inventory valuation04:38
FIFO05:42
LIFO06:36
FIFO vs. LIFO03:11
Simple and Weighted Average04:25
Comparison LIFO vs. FIFO vs. Av vs.WAV03:12
Non Historical cost09:28
Quiz207:34
Recording Inventory 
Accounting Records vs. Costing Records04:47
Inventory Recording system13:19
Stock Taking08:27
Quiz312:07
Additional Questions7:52
Conclusion09:12
Total3:25:01

Notes

Few things covered by us

Index

Terminology
Business Flow
Types of Inventory
Why Inventory Valuation?
Basis of Inventory Valuation
Purchase Cost
Methods of Inventory Valuation
Accounting Records vs Cost Records
Inventory Record System
Stock Taking

Terminology

Current Assets - assets that can be converted to cash within a year
Current Liabilities- obligations that have to be met within a year
Working Capital = Current Assets - Current Liabilities
Liquidity - the degree of ease of conversion of an asset to cash
Current Ratio = Current Assets / Current Liabilities
Direct Cost - cost that can be identified with the product
Overhead - indirect cost and cannot be identified with a specific product
Gross Profit Margin = (Gross Profit / Net Sales) x 100
Accounting Standards- ensure uniformity in the preparationof financial statements

Why Inventory Valuation?

True Income
True Financial Position
Liquidity Analysis
Statutory Compliance

Non Historical Costs

Standard Cost
Adjusted Selling price


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