1. Why is inventory an important item to both internal (management) and external users of financial statements? 2. What are the general guidelines for deciding which items should be included in inventory? 3. Explain the application of the cost principle to an item in the ending inventory . Define goods available for sale. How does it differ from cost of goods sold 1. Why is inventory an important item to both internal (management) and external users of financial statements? 2. What are the general guidelines for deciding which items should be included in inventory? 3. Explain the application of the cost principle to an item in the ending inventory . Define goods available for sale. How does it differ from cost of goods sold