The selection and use of inventories is required in most every case where the production, purchase, or sale of merchandise is an income-producing factor. Inventories must also be used wherever necessary to clearly reflect income as determined by the IRS.

An inventory is an itemized list, with valuations, of goods held for sale or consumption in a business. Through the use of inventories taxpayers measure the income in a single accounting period through the recognition of unsold goods on hand at the beginning and end of each tax year.

This CPE course provides an overview of the basic rules and will help you gain a full understanding of inventory concepts. Specifically, it will review the following:

• the use of inventories;
• the calculation of cost of goods sold;
• inventory valuation;
• inventory identification using the first-in, first-out and
• the last-in, last-out methods