1.5 CPE Fixed assets (tangible assets) can be one of the largest asset groups within an organization and properly accounting for the assets, their maintenance, and disposal are critical for any business. Accounting rules for fixed assets address capitalization, asset retirement obligations, depreciation, impairment, and disposal. Fixed assets are not held for resale but for the production, supply, rental or administrative purposes. Assets that are held for resale must be accounted for as inventory rather than fixed assets. Other important components involve record keeping, controls, policies and procedures, measurements, asset tracking, and auditing procedures.
Inventory is anything the company stores. In a retail context, inventory refers to your raw material as well as the stock of finished goods or products that you sell. It is measured in units of stock as well as the value of the stock you hold. In the manufacturing industry, inventory is divided into three major types:
- Raw material: All material that will be used to produce a product
- Work-in-progress/process: Parts manufactured but not yet assembled.
- Finished product: Assembled product that that is ready for a sale. A typical retailer only holds this type of inventory.
Inventory Management is the science of purchasing, supervising, controlling and dispensing stock for sale stored in a facility. It covers all aspects of stock management across the supply chain from the manufacturer to the point of sale manned by the retailer. The process of inventory management begins with the initiation of a PO and ends when an order is fulfilled/ delivered.
This session will focus on important concepts bookkeepers should be prepared to manage/understand in relation to all the components of inventory and fixed assets. We will review concepts of fixed assets such as: depreciation, capitalization, disposal, inventory including the methods of managing and counting inventory as well as recordkeeping.
NOTE: This course is one of a series of courses developed for the Professional Bookkeeping Certification program on Illumeo. The full curriculum of courses will provide you with the ultimate foundation for a career as a bookkeeper.
Note: Information within this course comes from readily available public domain documents and is utilized by the trainer as a supplement for relaying the course content.
Learning Objectives
- Explore the definition of fixed assets.
- Discover the capitalization of fixed asset costs.
- Discover the various methods and types of depreciation for fixed assets.
- Explore requirements for asset retirement.
- Explore the definition of inventory and inventory key terms.
- Explore the inventory process and inventory tracking.
- Explore inventory management techniques.
- Identify inventory count methods.
Last updated/reviewed: March 21, 2024
Included In Certifications
This course is included in the following Certification Programs:
14 CoursesProfessional Bookkeeping Certification
- Bookkeeping: Terminology and Process Execution
- Bookkeeping: Debits And Credits
- Bookkeeping: Cash vs. Accrual
- Bookkeeping: Payroll And Expenses
- Bookkeeping: Legal Entity And Chart Of Accounts
- Bookkeeping: Journals, Subsidiary Ledgers and General Ledger
- Bookkeeping: Responsibilities
- Bookkeeping: Fixed assets and inventory
- Bookkeeping: Accounts Payable/Accounts Receivable And Receipts
- Management Internal Control Essentials
- GAAP Principles, Assumptions and Considerations
- GAAP Presentation of Financial Statements
- Bookkeeping Basics – Case Study Scenario
- Useful Bookkeeping Tools
58 Reviews (262 ratings)
Reviews
Anonymous
(CPA)
I learned from this course about the fixed assets and inventory. Different depreciation methods for the fixed assets were introduced, including S/L, unit of production, sum of years digits, DDB, and MACRS. The factors impact the inventory are purchasing, receiving, supervising and controlling, and dispensing. It is important to reconcile the variance between the inventory records with the physical inventory.
Dan Bader
(Bookkeeper at Dan Bader Services)
This course has the most information and covers the widest topic sets so far in the Bookkeeping series. Given that, the course was very thorough. There were some errors in the slides: the 3rd bullet in Slide number 27 there s/b an "=" sign instead of a "+" sign in the formula. Also, the MACRS presentation is missing slide #42 which would show 3 types of GDS and 1 type of ADS table (from IRS?)
Anonymous
(Accounting Clerk)
As I am very much a visual learner, I really appreciate the PowerPoint that was used, I would however suggest that the lecturer be seen throughout the presentation, as it would make the course more personal and intriguing. I believe this course was a nice refresher and it will help me be more conscious when looking at the organization's fixed assets.
Anonymous
(Accountant)
I found it to be very informative and it will be a good asset to newly hired employees in these positions. I feel that it will get employees up to speed faster and more productive sooner.
There is not a sufficient amount of time to complete at work with my busy work schedule. I had to complete this course at home on my own time.
Alicia Watson
(Executive administrator at Ice sculpture inc.)
This course is full of useful information! She goes into great detail explaining fixed assets and the different methods of depreciation, as well as inventory processes and how to keep it all organized and under control with minimal hiccups. I really learned a lot and enjoyed this course!
Anonymous
(Parish Manager)
This course gave a great overview of what items to capitalize, different types of depreciation and how to calculate them/when they might be useful and how to manage sales inventory. That's not particularly useful in my line of work but I see it's value.
Anonymous
(Accounting Student)
This course is a good review of fixed assets and inventory and comprises a lot of information. I appreciate being able to print the slides and have them as a reference, even though some slides were not covered in the video.
Anonymous
(Inventory Accounting Manager)
The course accomplished it's objectives. It was a brief overview of fixed assets and inventory. It helped to provided very basic information about both topics. and quick oeverview of important aspects of both topics.
Lisa Marie Harrington
( at City of Richardson)
Lynn Fountain consistently provides clear and thorough courses. This course is a great refresher for depreciation methods, retirement and inventory. Recording examples were also included in the course.
Anonymous
(Accounting Manager)
Long course, but great refresher of fixed assets and inventory management. I would say this is the proper way, however in smaller companies I would not say this is how its always done, but should be.
Anonymous
(Accounting Manager)
This course helped me learned a lot about the fixed assets. Accountants would get the most use out of this course and would help them understand more about everything that was in this course.
Lawrence Hirsch
(Controller at Builders design)
I like this course Lynn as content was more sophisticated in the bookkeeper's role. The explanations and examples of fixed assets VS. Inventory were spot on.
Thank you,
Larry
Anonymous
(caretaker)
I really enjoyed this lesson because it gave me a bit of a challenge. But overall I really enjoyed learning about this, and I feel like the information was very thorough.
Anonymous
(None)
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Anonymous
(AP specialist)
this course is very helpful. A lot of information about inventory and methods and the types of inventory. I learned a lot and would recommend to anyone interested.
Anonymous
(Revenue Accountant)
Every course I've taken by Lynn Fountain has been very good. This is an excellent review of Inventory, Inventory costing methods, Fixed Assets and Depreciation.
Alpha Kakay
(Accounting at Five Guys Enterprise)
The course was intense and provided the benchmark for understanding the basis of inventory management and fixed assets management, classification and depreciation
Anonymous
(Corporate Controller)
As always, Lynn does an excellent job summarizing and providing adequate real life examples to help bring the topic current and not just generalize the course.
Anonymous
(Accountant)
I thought this course was very interesting and helpful. I thought the instructor explained the topic very well. I would recommend this course to others.
Anonymous
(Accountant)
Very detailed course, clear explanations with good examples. Expected to see how depreciation records look like on IS, it was mentioned but not shown.
Anonymous
(Sr. Treasury Analyst)
This course provided a thorough review of fixed assets and inventory. It provided a lot of information with examples to enhance your understanding.
Daniel De La Cruz
(Accounting Specialist at Improve YourTomorrow)
This lesson presented great insight on Inventory, Depreciation, and Fixed assets. Lynn does an amazing job at presenting concise information.
Mark Eastman
(Accountant at Self)
A fine course on the basics of Fixed Assets and Inventory Management. I did find the MACRS section to be confusing and underexplained.
Anonymous
(Unemployed)
This course was a lot of confusing info all at once. I would have liked to have it in two separate classes for better understanding.
Anonymous
(Senior Director Internal Audit)
Nice introduction to Fixed Assets and Inventory bookkeeping. It also severed as a good refresher on depreciation methods.
Anonymous
(Assistant Controller)
Great review course for fixed assets and inventory. It is nice to use example to illustrate various depreciation methods.
cynthia wilson
(Accountant at gccs)
This was a very good course on Fixed Assets and depreciation. I had some internet trouble but love the powerpoint slides
Anonymous
(Anlagenbuchhalter)
The course was clear not too long. In the Asset Area, a lttle more about ihe differences between IFRS/USGAAP and HGB.
Babette Grothe
(Office Manager at Aircraft Turbine Works)
WOW! this was a difficult one for me. A lot of information. The instructor is great I just think a lot to cover.
Meryl Betz
(Project Management Administrator at First Restoration)
Lots of things in this course that I remember learning in college accounting classes. A useful refresher course.
Anonymous
(Sr. Accounting Manager)
Good overview of depreciation methods, inventory methods and inventory processing and managing techniques.
Anonymous
(Owner)
One segment where the slides didnt match the readings. Was a little confusing but was later cleared up.
NYDIA RAMIREZ
( at PURE GUARD LLC)
The provided text is both informative and serves to reinforce the understanding of the course syllabus.
I found this section to be very challenging. Depreciation is not one of my fondest things to learn.
Anonymous
(Clerical Supervisor 2)
I found this course a little difficult. Some of the example were a little difficult to understand.
Anonymous
(Management Control Auditor)
The inventory section seemed to be more operational knowledge vs. how to account for inventory.
James Chang
( at Samis)
straight forward and easy to understand. good review of deprecation methods, but pretty basic.
Anonymous
()
Very thorough course; good to have slides for future reference. Would recommend to others.
Anonymous
()
This was a helpful overview of inventory and fixed assets. The slides are a good resource.
Gayla Sterrett
(HRIS at GPSTRATEGIES)
the course had a lot of useful information but seems somewhat choppy when going over it.
Eric Chapin
(Accounting Manager at Stephen Gould Corporation)
This was a very good refresher on depreciation, fixed assets, inventory management etc
Anonymous
(Senior Accountant)
A lot of information is presented on both fixed assets and inventory. Very detailed.
Anonymous
()
Could have been broken into two separate lessons. A lot of information to cover.
Anonymous
(Accounting Manager)
Great review course for methods of accounting for fixed assets and inventory.
Anonymous
()
This is a solid beginner level course that was useful as a refresher. Thanks!
Yann Moreau
(Owner at 3GSP srl)
Good course.. still some things that I have to integrate... good examples
Anonymous
(SVP)
Great overview of fixed assets and inventory hitting on the key points.
Muhammad Baig
(Managing Director at N/A)
Well-balanced description of various concepts pertaining to the topic.
ANGELA NUNEZ
(NOTARY PUBLIC/NSA/PUBLIC TAG AGENT at SWEETLAKE TITLE COMPANY, LLC)
THIS WAS A TOUGH ONE FOR ME TO FOCUS ON. VIDEOS AND MATERIAL WAS GOOD.
Anonymous
()
Great refresher course on accounting for fixed assets and inventory.
Alyssa Borenstein
(n/a at Casper)
difficult course, teaches the ins and outs of fixed asset accounting
Anonymous
(Staff Accountant)
This is a great course of the basics of fixed assets and inventory.
Abraham Minto
( at Abraham Minto LLC)
Lynn’s course on Fixed Assets and Inventory was very comprehensive
Anonymous
(Senior Accountant)
Enjoyed the overview and refresher of these areas of accounting!
Anonymous
(Office Manager)
Thorough overview and good lecture with applicable examples.
Roxane Wells
(Senior Manager at Stevenson Smith CPA's LLC)
The instructor does a good job of explaining the concepts.
Anonymous
(Owner)
Comprehensive and easy to follow along with and remember.
Maria Lund
(Compass Consultant at Salo LLC)
Last question of the exam is worded poorly/confusing.
Prerequisites
Course Complexity: Intermediate
No Advanced Preparation or Prerequisites are needed for this course. However, it is recommended to take the other courses in the series prior to completing this one.
Education Provider Information
Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA
95113
Contact:
For more information regarding this course, including complaint and
cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to
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Course Questions and Answers(4 Questions)
Lynn FountainCPA, CGMA, CRMA, MBA, cPIA, Consultant, Author, Trainer
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On slide #31 regarding DDB it states, "At the end of year five, accumulated depreciation is $14,176." Please explain how you derived at that number. I thought you would add all of the depreciation for the five years and that amount is $20,170. Thanks for your help.
You are exactly correct. I made an addition error. Illumeo is changing the slides and tape. Thank you for the catch
On the Final Exam one of the questions reads, "When stocking products in a warehouse, what things should be considered?" Part of what is stated as the correct answer has this statement: "Stock the most frequently used items towards the back of the warehouse so they are more secure." I understand that frequency of use is a factor when stocking a warehouse, but is that statement really true?
Thanks for your help.
Thanks for the note. That should not be the correct answer. I will check it and have Illumeo correct it.
I checked the question the last choice should actually say B and C which would be the correct answer. Thanks for pointing this out. Illumeo is correcting it