Explain the audit for inventory

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: Discuss some measures that should be taken to maintain control over merchandise inventory.

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: Importance of inventory control system

A: Importance of inventory control system:-

Q: Explain what is meant by the Internal Revenue Service conformity rule with respect to the inventory…

A: Internal Revenue Service conformity rule is when prices rise and inventory quantities are not…

Q: In the audit of inventory the auditor must perform important procedures prior to the actual…

A: Audit of inventory refers to the cross-verification of inventory physically present with the…

Q: Identify whether each description best applies to a periodic or a perpetual inventory system.…

A: Perpetual inventory system is a system that records real time transactions of received or sold…

Q: what are the audit asssertions related to inventory?

A: Audit is the process of checking and examining books of accounts and financial statements so that it…

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: Describe the types of errors in inventory.

A:

Q: Explain the term inventory turnover.

A: The ratio analysis is performed to analyze the statements of the business on the basis of various…

Q: Explain issues that analysts should consider when examining a company’s inventory disclosures and…

A: Inventory Disclosure: Inventory disclosure is useful for management to evaluate inventory…

Q: A В D REQUIRED: IDENTIFY THE ASSERTION[S] RELATED TO EACH AUDIT PROCEDURE ASSERTION[S] E= existence…

A: Audit Procedure:- An audit procedure is referred as the procedure which is used by the auditor to…

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: Which of the following is a substantive test in relation to completeness? a. Inspect physical…

A: Inspect physical inventory, checking from inventory records to physical stock is an Audit assertion…

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: According to the Conceptual Framework, physical count of inventory is an example of

A: A physical inventory count is an approach where company's staff is involved in counting company's…

Q: A REQUIRED: IDENTIFY THE ASSERTION[S] RELATED TO EACH AUDIT PROCEDURE ASSERTION[S] E=existence…

A: Auditing:- An audit is the referred as the physical examination of books of accounts. This can be…

Q: Explain the significant inherent risks associated with inventory. Explain the process of physical…

A: Internal controls mean to control the internal activities of the company. the internal control is…

Q: The purpose of tracing a sample of inventory tags to a client’s computerized listing of inventory…

A:

Q: Why is inherent risk for the existence of inventory an issue in the expenditure cycle audit?

A:

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: Define Perpetual inventory system.

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

Q: An auditor would vouch inventory on the inventory status report to the vendor’s invoice toobtain…

A: Management assertion: Management assertion refers to the claim made by the management ensuring the…

Q: In the basic technology system, the inventory control clerk reviews the purchase requisition file to…

A: Inventory purchase procedure: This procedure takes into account the functions relating to…

Q: How does the procedure for determining inventory requirements differ between a basic…

A: Batch processing system: A technique that is used to collect the data and program together in a…

Q: What is the primary reason we perform physical inventory observations? A. To obtain sufficient…

A: Inventory : It is the stock of raw material work in process and finished goods Kept in the store for…

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: Explain the appropriate accounting treatment required when an inventory error is discovered.

A: Assets: These are the resources owned and controlled by business and used to produce benefits for…

Q: Understand inventory classifications and different inventory systems.

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

Q: Describe the inventory recording methods.

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

Q: audit of a client's inventory balance

A: Option a is wrong because the difference may be attributable to the estimate made by the auditor.…

Q: Identify inventory classifications and different inventory systems.

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

Q: How does inventory control deficiencies affect the development of audit procedures for inventories

A: Answer: The audit procedures are to be designed such that the total audit evidences can be…

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: Explain the following statement: “Inventory errors correct themselves.”

A: Solution: Introduction: Inventory means goods are available for sale and raw materials used in the…

Q: Describe measures to control merchandise inventory.

A: Control over merchandise inventory: For a merchandise business, maintaining an effective control…

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.