What Are the Four Categories of Inventory Costs

question 67

Essay

What are the four categories of inventory costs?

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Definitions:

Accounts Payable

Accounts payable are liabilities representing the amounts that a company owes to creditors for purchases or services rendered that have not yet been paid.

Supplies Expense

The cost associated with using up supplies during an accounting period, which is recorded as an expense.

Merchandise Inventory

The total value of a company's goods available for sale to customers, typically recorded as an asset on the balance sheet.

Accounts Payable

Liabilities owed by a business to creditors for purchases of goods and services on credit.