1. Identify and explain the management issues associated with accounting for inventories.
2. Define inventory cost and relate it to goods flow and cost flow.
3. Calculate the pricing of inventory using the cost basis under the periodic inventory system, according to the specific identification method; average-cost method; first-in, first-out (FIFO) method; and last-in, first-out (LIFO) method.
4. Apply the perpetual inventory system to the pricing of inventories at cost.
5. State the effects of inventory methods and misstatements of inventory on income determination, income taxes, and cash flows.
6. Apply the lower-of-cost-or-market (LCM) rule to inventory valuation.
7. Estimate the cost of ending inventory using the retail inventory method and gross profit method.