Describe the Three Categories of Objectives and Five Essential Components

question 43

Essay

Describe the three categories of objectives and five essential components of the COSO 2.0 framework.

---

Definitions:

Inventory

The total amount of goods and materials held by a company for the purpose of resale or production.

Average Cost Method

A method of valuing inventory that is based on the assumption that the costs of all items on hand are averaged and shared evenly among all units.

Ending Inventory

The total value of goods available for sale at the end of a specific accounting period.

Average Cost Method

An inventory costing method where the cost of goods sold and remaining inventory is calculated based on the weighted average of all purchases.