According to Kohler's Dictionary for Accountants, inventory is defined as " Raw materials and supplies, goods finished and in process of manufacture and merchandise on hand, in transit and owned, in storage or consigned to other at the end of an accounting period. Inventory forms a significant portion of the total assets of many enterprises and a lot of working capital is invested in this item. Inventories generally constitute the second largest item after fixed assets, in the financial statements, particularly of manufacturing concerns. This is why valuation of inventories has assumed significance in recent years. The values attached to inventories can materially affect the operating results as shown by trading and profit and loss account and the financial position of a business firm because closing inventory (stock in trade) is shown on the credit side of the trading account and this amount is also shown as current asset in the Bala...
Accounting is an old term, some of the Calculations of accounting taken from "Arthasastra"written by chanikya Accounting systems in modern methods are introduced by LUCOPACIOLO in 1494 from Arthasastra It's origin to an Italion Longuage at venees nagar (Italy) Hence he is the Father of Accounting. It was converted into English Language by'HUGE OLD CASTLE' in 1543. In the modern methods the double Entry System was Introduced and given Debit and Credit principles by the LUCOPACIOLO.
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