Blog & Insights

Thinking about finance infrastructure.

Operational insights, AI accounting research, and perspectives on building modern finance systems.

AccountingAug 28, 20264 min read

What is finished goods inventory?

Completed products ready to sell to customers. These units sit in current assets until a sale moves their cost to the P&L.

AccountingAug 28, 20264 min read

Understanding work in process inventory

Partially completed goods still moving through production. You will see it abbreviated as WIP.

AccountingAug 28, 20264 min read

How to understand raw materials inventory

Purchased materials waiting to enter production. These items sit in current assets until a maker issues them to the shop floor.

AccountingAug 28, 20264 min read

What is inventory?

Goods held for sale or used to produce goods for sale. This stock sits as a current asset on the Balance Sheet until you sell it or use it up.

AccountingAug 28, 20264 min read

Elements of lower of cost or market

A rule requiring inventory to be carried at the lower of its cost or what it can actually be sold for.

AccountingAug 28, 20264 min read

Understanding weighted average cost

An inventory method that spreads total cost evenly across all units on hand.

AccountingAug 28, 20264 min read

What is LIFO?

An inventory method that assumes the newest units are sold first. You will see it written as LIFO, for last in, first out.

AccountingAug 28, 20264 min read

How does FIFO work?

An inventory method that assumes the oldest units are sold first. You will see it written as FIFO, for first in, first out.

AccountingAug 28, 20264 min read

How do you choose an inventory valuation method?

The method used to assign cost to units held and units sold. You pick one method and use it consistently, so the same rule prices units on the shelf and units that sold.

AccountingAug 28, 20264 min read

How does an inventory reserve work?

A contra-asset account estimating inventory value that will not be recovered. It reduces inventory so the Balance Sheet shows a more honest current asset.

Page 1 of 5

Interested in learning more?

Get a firsthand look at how Pasento's finance operations platform can transform your accounting operations.