DEPRECIATION METHODS

Q: In which financial statement is the inventory account balance presented?

A: In general there are Four Major components of financial statements a) Balance Sheet  b) Profit and…

Q: How do inventory errors affect the financial statements.

A: The financial statements of the business includes the income statement and balance sheet.

Q: Can you explain in detail how you got the Inventory Remaining(units) and the total Inventory…

A: Inventory valuation refers to the process of assigning a monetary value to the inventory of a…

Q: What are the two types of inventory accounting systems? Briefly describe each.

A: Inventory Accounting Systems: Merchandise operation is an operation undertaken by the company to…

Q: How do you enter an adjusting entry for Inventory?

A: Inventory adjustment Fluctuation in the inventory is a serious issue for a business entity. The…

Q: Inventory and Purpose of Inventory management

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: Define inventory.

A: Inventory: Inventory consist of total of three components: raw material, work-in-process and…

Q: Describe the alternative approaches for recording inventory write-downs.

A: Inventory write-down: As per GAAP (Generally Accepted Accounting Principles), the companies are…

Q: How do we record and report inventory shrinkage? Which accounts are affected?

A: Inventory Shrinkage:-When inventory has become less than the actual inventory recorded is known as…

Q: compute the number of units in ending inventory

A: Ending inventory represents the units of inventory that is remaining unsold as at a given date.…

Q: The Inventory account balance appearing in a perpetual inventory worksheet represents the

A: The products and materials that a company keeps on hand with the intention of reselling, producing,…

Q: Indicate the effects of inventory errors on the financial statements

A: Solution- 1-A merchandising company must be sure that it has properly valued its ending inventory.…

Q: What is inventory shrinkage? Describe the adjusting entry that would be recorded to account for…

A: Inventory shrinkage: When there is a difference between inventory as per books and actual inventory…

Q: Explain the ABC inventory management system and the just-in-time inventory managementsystem

A: The objective of this question is to understand two different inventory management systems: ABC and…

Q: Explain the ABC inventory management system and the just-in-time inventory managementsystem

A: The objective of this question is to understand two different inventory management systems: ABC and…

Q: Describe Change in Inventory Method and Inventory Errors.

A: Change in Inventory method:   Inventory change is the difference between the amount of last period's…

Q: Differentiate between perpetual and periodic Inventory system.

A: Under the perpetual inventory system, every single movement of the inventory traces as and when they…

Q: his account is used to recognize the cost of an inventory that is sold as expens

A: Solution: When inventory is sold, then this cost should be transferred to Cost of goods sold…

Q: How is Inventory audited?

A: Introduction Inventory audit is an analytical procedure that cross checks the financial records with…

Q: When recording a purchase of inventory on credit, which accounts are typically affected? A) Debit…

A: When assets or expenses increases it should be debited and when decreases it should be…

Q: a) Discuss the reasons why a proper understanding of the free on board (FOB) terms is important when…

A: FOB is an abbreviation for free on board. Free on Board means the seller takes risk till the time…

Q: Features of perpetual inventory system

A: Required  Features of perpetual inventory system?

Q: Define the term inventory shrinkage. How is the amount of inventory shrinkage determined in a…

A: Inventory Shrinkage refers to that amount of inventory which is in excess and listed in the…

Q: Cash paid for inventory

A: Cash paid for inventory is the amount which is paid to the suppliers of the inventory. It can be…

Q: Give TWO examples of methods of inventory accounting. (With explanation)

A: Inventory accounting : Inventory accounting is a method used to ascertain the cost of inventory.…

Q: Define Perpetual inventory system.

A: A perpetual inventory system updates and records the transaction as and when it occurs either at the…

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.