What Is The Physical Flow?

How income is a flow?

The circular flow of income is a way of representing the flows of money between the two main groups in society – producers (firms) and consumers (households).

On the scale of the whole economy, this is known as national income – the total amount of income earned over a given time period..

What is physical flow of goods?

The physical flow of goods refers to the actual timing of when goods are sold. For example, a grocery store may use a FIFO cost flow assumption for financial statement purposes and this may reflect the physical flow of some inventory items but not others.

What is meant by real flow or physical flow?

Real flow or physical flow refers to the flow of factor services from households to firms and the corresponding flow of goods and services from firms to households.

What is nominal flow?

Money flow or nominal flow refers to the flow of factor payments from firms to households for their factor services and the corresponding flow of money from households to firms, in the form of consumption expenditure on the purchase of goods and services produced by the firms.

What is ownership flow?

Ownership flow: the movement of title through the channel. Information flow: the individuals who participate in the flow of information either up or down the channel. Promotion flow: the flow of persuasive communication in the form of advertising, personal selling, sales promotion, and public relations.

Which comes last in the flow of costs?

Following the sale of the goods, the flow of costs finally moves to cost of goods sold. There are several methods for accounting for the flow of costs. These include LIFO (last in, first out), FIFO (first in, first out), specific identification, and weighted-average cost.

What is the cost flow assumption?

Average cost flow assumption is a calculation companies use to assign costs to inventory goods, cost of goods sold and ending inventory. … Average cost flow assumption is also called “weighted average cost flow assumption.”

What is the difference between stock and flow?

A stock is measured at one specific time, and represents a quantity existing at that point in time (say, December 31, 2004), which may have accumulated in the past. A flow variable is measured over an interval of time. Therefore, a flow would be measured per unit of time (say a year).

What are the 4 channels of distribution?

While a distribution channel may seem endless at times, there are three main types of channels, all of which include the combination of a producer, wholesaler, retailer, and end consumer. The first channel is the longest because it includes all four: producer, wholesaler, retailer, and consumer.

What is the correct flow of manufacturing costs?

The manufacturing cost flow begins when costs are incurred for direct materials, direct labor, and overhead. Materials costs flow first into the Materials Inventory account, which is used to record the costs of materials when they are received and again when they are issued for use in a production process.

What are the two types of circular flow?

The two types of circular flows are: (i) Real flow (ii) money flow.

What does product flow mean?

Product flow is the distribution channel that is viewed as a unified system of interdependent organizations in which intermediaries work together to build value as products proceed through the channel to the consumer.

What is promotion flow?

PROMOTION FLOW The promotion flow refers to the flow of persuasive communication in the form of advertising, personal selling, sales promotion, and publicity. Here advertising agency is in the flow as it is providing and maintaining the promotional flow.

What is meant by real flow?

Real flows refer to the flow of the actual goods or services, while money flows refer to the payments for the services (wages, for example) or consumption payments.

What is the difference between the flow of costs and the physical flow of goods?

The cost flow assumption that a business makes may have nothing to do with the actual flow of inventory into and out of the business. The physical flow of goods refers to the actual timing of when goods are sold.