This discussion thread test the Learning Objective of 8-2, Explain which physical units of goods should be included in inventory.

Determining the physical quantity that should be included in a simple matter because that amount consists of items in the possession of the company. The cost of inventory includes all necessary expenditures to acquire the inventory and bring it to its desired condition and location for sale or for use in the manufacture process.

Required:

1. Identify describe the situations in which physical quantity included in inventory is more difficult than simply determining items in the possession of the company.

2. In addition to the direct acquisition costs such as the price paid and transportation costs to obtain inventory, what other expenditures might be necessary to bring the inventory to its desired condition and location?