Describe the alternative approaches for recording inventory write-downs.

Q: How is the cost of ending inventory determined when pools are used?

A: A LIFO inventory pool is a method under which the individual units having same physical similarities…

Q: Why is it important to obtain shipping and receiving cutoff information during the inventory…

A: Cut-off Procedures:   The audit procedures applied to separate the transactions from one period to…

Q: Do you apply the LCNRV method to each individual item, to a category, or to the total of the…

A:

Q: Differentiate between periodic and perpetual inventory system with the help of an example.

A: The monetary amount associated with the goods in inventory at the end of an accounting period is…

Q: what is FIFO inventory method?

A: FIFO inventory method is one of the methods of calculation of value of ending Inventory and cost of…

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: The flowchart below illustrates two alternative inventory ordering methods.  based on this…

A: Alternative two is used sometimes by the managers who do not have command over computer controls for…

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: whats the inventory tracking for this?

A: Goods which are held for the resale by the business and the business deals with such type of…

Q: Define inventory shrinkage.

A:

Q: What is an inventory roll-forward? What roll-forward tests should be performed?

A: It is the systematic development by way of (rolling forward) pre-accounting data of fresh reporting…

Q: What is the main distinction between perpetual and periodic inventory systems? Which type of system…

A: Explain the main distinction between perpetual inventory system and periodic inventory system and to…

Q: characteristics of a periodic inventory system, except

A: Characteristics of a periodic inventory system, except (C) INVENTORY RECORD IS ALWAYS UP TO DATE.

Q: Demonstrate how the inventory cost flow assumption utilized might have an impact on liquidity…

A: Inventory cost flow assumptions refers to the way in which costs are removed from inventory and…

Q: Explain the appropriate accounting treatment required when a change in inventory method is made.

A: Definition:   Change in inventory method: Change in inventory method is said to be the difference…

Q: differentiate between the two types of counting systems for inventory

A: The question is related to Accounting of Inventory systems. The two types of Accounting systems for…

Q: How is Inventory audited?

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

Q: Which of the following statements appropriately describes attributes of perpetual and periodic…

A: Inventory is the goods which company is having to sale or which is also known as goods available for…

Q: Explain the audit for inventory

A: Directional testing is been used to audit the procedures  of statement of financial position items.

Q: Discuss the different types of Inventory system

A: Traditionally the inventory is recorded by manually counting the items in the warehouse and it is…

Q: Are there different methods used to account for perpetual inventory?

A: Perpetual inventory is a continous estimation of the inventory balances based on our books of…

Q: Comparing FIFO and LIFO, which one provides the more meaningful measure of ending inventory?

A: FIFO: Under this method, ending inventory is valued at the latest price and Merchandise sold are…

Q: In your own words, discuss the differences between a perpetual and periodic inventory system. Your…

A: Inventory is the current asset posted on the balance sheet of the company.

Q: What are the reasons for making an estimate of the value of ending inventory?

A: Ending inventory is the value of goods available in the stock at the end of the period

Q: Explain the relationship between tests of the acquisitionand payment cycle and tests of inventory.…

A: The acquisition, as well as payment cycle, has the relationship with the inventory accounts in the…

Q: Describe the typical approach for recording inventory write-downs.

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

Q: Explain Inventory Estimation Techniques.

A: Inventory Estimation Techniques:

Q: Describe some inventory control systems that are used in practice

A: Inventory control system: The inventory control system can be defined as the use of a computerized…

Q: What is the purpose of disclosing the difference between the reported LIFO inventory amounts and…

A: Perpetual and periodic inventory system: In merchandise business, there are two types of inventory…

Q: Which inventory method is least likely to be used under IFRS? A . First in, fi rst out (FIFO).

A: Inventory is an important current asset for an organisation’s accounting, thus it is essential that…

Q: List and explain the substantive tests of Inventory and give example.

A: Substantive procedures are exercised by an auditor to detect material misstatements at the financial…

Q: How does analyzing inventory errors is helpful?

A: Accounting is primarily concerned with identifying, recording, measuring, summarizing transactions…

Q: Describe the backflushing or post-deduct system of inventory recordkeeping

A: Backflushing is also known as the post-deduct system. When a product is shipped out of stock or used…

Q: Provide examples of some procedures that can avoid inventory shrinkage.

A: In the business organization when the situation of inventory lost, theft, or damage occur is known…

Q: Describe the inventory recording methods.

A: Inventory recording methods are two types:   Periodic inventory system Perpetual inventory system

Q: Explain inventory system and its functions

A: Inventory is the detailed list of items that are present on hand. It constitute of all the finished…

Q: Explain an example of periodic inventory system.

A: In periodic system the transactions of sales and purchase of inventory is recorded at a certain…

Q: Explain how to report and analyze inventory.

A: Merchandise Inventory: Merchandise is the stock of goods bought by a wholesaler, or a retailer, or a…

Q: Differentiate between perpetual and periodic Inventory system.

A: Perpetual inventory system refers to the method of inventory management which records the real-time…

Audit Procedures

Audit Procedures are methods and techniques performed by the auditor to determine the quality of financial information of clients, thereby expressing an opinion on true & fair view of financial statements and entity position. They are identified and applied at the planning stage of audit after determining audit objectives, scope, approach, and risk assessment.