whats more liquid notes receivables or investments

Now, increase in the bad debt expense leads to increase in the allowance for doubtful accounts. These amounts are determined after considering the bad debt expense. The accounts receivables are presented in the balance sheet at net realizable value. This is because each unit of inventory has a different cost.Īccounts receivables are the amounts that a company’s customers owe to it for the goods and services supplied by the company on credit. These methods are used to bring a systematic approach in determining the cost of inventory. Therefore, various inventory costing methods have to used once the unit cost of inventory is determined. abnormal waste of raw material, labor and overhead,.However, following costs are excluded from the cost of inventory: This means cost of inventory includes purchase cost, conversion costs, freight-in and similar items that relate to the above rule. Now, cost of inventory includes all the costs that are necessary to bring the goods into such a place and condition that they are further sold.

Finally, finished goods refer to the items that are completed and are awaiting sale. Work-in-process refer to the goods that are still in the manufacturing process and are yet to be completed. Raw materials consist of goods that are used for manufacturing products. Whereas, goods available as raw materials, work-in-process and finished goods form a part of inventory in case of manufacturing firms. Thus, goods available for resale form a part of inventory in case of merchandising companies. It is important to note that the items forming a part of inventory are the goods that would be sold in the normal course of business. Shortly be consumed in the manufacturing of goods that would be sold eventually (raw material).In the production process and would eventually be sold (work-in-progress).Stocked for the purpose of sale in the normal course of business (finished goods).Inventories are the sum of items that are either:

Whats more liquid notes receivables or investments