Identify the following questions as most likely to be asked by an internal (I) or an external (E) userof accounting information. Which inventory items are out of stock?

Q: What is the main difference between a perpetual inventory system and a periodic inventory system?…

A: Inventory can be valued under two methods. 1. perpetual inventory method 2. Periodic inventory…

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: Inventory is classified as a current asset in a classified balance sheet. O True False

A: Assets are classified as current and non-current in the balance sheet. Current assets are meant to…

Q: Changing the method of inventory valuation should be reported in the financial statements under what…

A: Inventory- A manufacturing company's inventory is a critical current asset. Inventory refers to the…

Q: In the Off-Balance-Sheet Inventory Financing instance, how may auditors have identified the…

A: This question explains about the Off-Balance-Sheet Inventory Financing instance

Q: If a company purchases inventory on account, what type of accounts are affected? (i.e., assets.…

A: Inventory :- It is raw materials , work in progress , finished goods, which is used to produce…

Q: If inventory errors are said to correct themselves, why are accounting users concerned when such…

A:

Q: Discuss the importance of accounting independence in accounting information systems. Give an example…

A: Accounting Information System:   The system which helps to gather, store and process the accounting…

Q: Explain "the inventory process sits between the revenue and the purchasing processes. the subject…

A: Inventory management is defined as a process of ordering, managing, storing, and implementing the…

Q: What aspects of accounting for inventory on financial statements would be of interest to…

A: Inventory can be defined as assets held for sale in the ordinary course of business or in the…

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: Ethics within inventory estimates and other creative accounting methods. Channel stuffing, swaps,…

A: Ethics implies the arrangement of rules that the association ought to follow. While in business,…

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: Which income statement account(s) would be affected by a policy choice at the same time as the…

A: Inventory is directly related to the cost of goods sold. To change the policy of valuation of…

Q: How can an accounting change cause a company to increase a previously reported inventory amount?

A:

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: according to which section (s) in the Accounting Act the inventory is assessed. Explain your reasons…

A: Inventory includes the goods available for sale in the normal course of business or the finished…

Q: How is Inventory audited?

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

Q: What are inventory stock taking system

A: The answer for the theory question on inventory stock taking system is discussed hereunder : Stock…

Q: When a company changes its inventory method to LIFO, an exception is made for the way accounting…

A: Explain the difference in the accounting treatment of a change to the LIFO inventory method from…

Q: In which of the following Inventory techniques are the stock taking done either regularly or…

A: Inventory techniques are the methods used for keeping or updating inventories.

Q: Describe a situation where a merchant would use the specific identification method for recording…

A: A merchant would use specific identification method when the individual items in inventory can be…

Q: What inventory accounts are used by a manufacturer? In what financial statement will appear?

A: An inventory account or merchandise inventory account is an account to record the inventory…

Q: Required: 1. Prepare the income statements to reflect the correct amounts, taking into consideration…

A: Overstatement of ending inventory will reduce the cost of goods sold and also increase the opening…

Q: Complete an inventory valuation using both the LIFO and FIFO methods and make an educated choice…

A: FIFO Method Under FIFO method, the goods which are purchased first are sold first LIFO Method Under…

Q: Identify what oversights inventory turnover ratio can provide to a financial analyst.

A: Lets start with basic understanding. Inventory turnover ratio is efficiency ratio which indicates…

Q: TRUE OR FALSE? The increase in the provision for inventory obsolescence is treated as a change in…

A: Accounting policies are the set of principles to be followed in the preparation of financial…

Q: Identify the following questions as most likely to be asked by an internal (I) or an external (E)…

A: Users of financial information:   Users of financial information are broadly classified into two…

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: 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: Explain briefly the application of the LCM rule to ending inventory. Describe its effect on the…

A:

Q: Describe the accounting treatment for a change in inventory method other than to LIFO.

A: Method of Inventory: Inventory refers to the current assets that a company expects to sell during…

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: How should accounting be able to catch up with the high sales return rates, particularly on…

A: Inventory management: Inventory management can be defined as a system to measure and record the…

Q: company will be affected by the changes in inventory method

A: Inventory method is a retail accounting method used to estimate the value of a store’s merchandise.…

Q: i) Explain the main causes of inventory decreasing and increasing. (ii) What is the accounting…

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want…

Q: What are the origins and fundamental concepts underlying inventory problems? what are they explain…

A: Introduction:- Inventory management is a way of buying, keeping, and selling inventories – both raw…

Q: What can be the effect of inventory errors on the financial reports? How can these errors be…

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

Q: What makes the recording of inventory at its proper amount difficult on the financial statements?

A: Inventory is the current assets of the company. In a manufacturing concern, inventory includes 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.