Chapter 25
                                                                             Inventories
                                            What You’ll Learn
                                                       Explain the importance of maintaining accurate 
                                                            inventory records.
                                                       Explain the difference between a periodic and a 
                                                            perpetual inventory system.
                                                       Take a physical inventory count and record 
                                                            inventories.
                                                       Determine the cost of merchandise inventory using 
                                                            the specific identification; first-in, first-out; last-in, 
                                                            first-out; and weighted average cost methods.
                                                       Assign a value to merchandise inventory using the 
                                                            lower-of-cost-or-market rule.
                                                    Glencoe Accounting  Unit 5  Chapter 25   Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.                           2
                                                                              Chapter 25
                                                                             Inventories
                                            What You’ll Learn
                                                       Explain the accounting principles of consistency 
                                                            and conservatism.
                                                       Define the accounting terms introduced in this 
                                                            chapter.
                                                    Glencoe Accounting  Unit 5  Chapter 25   Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.                           3
                                                       Chapter 25, Section 1
                 Determining the Quantity of Inventories
                                            What Do You Think?
                                            What methods have you seen being used to take 
                                            inventory in retail stores? 
                                                    Glencoe Accounting  Unit 5  Chapter 25   Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.                           4
    SECTION 25.1                                              Determining the Quantity of 
                                                              Inventories
                                                Main Idea
                                                Two methods of tracking merchandise are the perpetual 
                                               inventory system and the periodic inventory system.
                                                You Will Learn
                                                           how businesses use inventory control 
                                                                information.
                                                           how businesses keep track of inventory.
                                                    Glencoe Accounting  Unit 5  Chapter 25   Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.                           5
    SECTION 25.1                                              Determining the Quantity of 
                                                              Inventories
                                                Key Terms
                                                           perpetual inventory system
                                                           point-of-sale terminal (POS)
                                                           online
                                                           periodic inventory system
                                                    Glencoe Accounting  Unit 5  Chapter 25   Copyright © by The McGraw-Hill Companies, Inc. All rights reserved.                           6