What analytical procedures might reveal obsolete or slow-moving inventory?

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: Which of the following is not an advantage of a perpetual inventory system? a. Assists in the…

A: The perpetual inventory method is a much better method in comparison to the periodic inventory…

Q: What is the concept of material inventory error?

A: Raw materials inventory: Raw material inventories are the primary materials which are used in the…

Q: When assessing inventory management policies, is the current ratio or acid-test ratio more…

A: Current Ratio = Current Ratio is Calculated by dividing the current Assets with current liabilties.…

Q: What is inventory blanket lien?

A: Lien: Lien is a lawful right in contradiction of assets that are usually utilized as security to…

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: Which of the following is not an advantage of a perpetual inventory system? a. assits in the…

A: Under the perpetual inventory system, transaction related to the inventory is updated immediately as…

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: Which of the following might be attributed to efficient inventory management? Select the correct…

A: All of the choices given

Q: Which of the following statements regarding inventory shrinkage is not true?

A: Suppose that there is inventory of $400,000( 5,000 units) in any firm in the beginning of accounting…

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: What is inventory shrinkage? What are some of the reasons for inventory shrinkage?

A: Inventory Shrinkage :  As the name suggests, it is considered as shrinking or shortening of…

Q: Management and auditor are concerned about inventory control function in automated system? Why? How…

A: Inventory control function in automated system :                   In automated system, inventory is…

Q: Which of the following methods of inventory control will be used in case of a business whose…

A: Tracking down of every single item of inventory individually from the time it enters in production…

Q: A master production schedule is most likely to be useful in O identifying erroneous journal entries.…

A: Solution: A master production schedule is the prepared by company to estimate its production for the…

Q: Discuss how a change to the LIFO method of inventory valuation is handled when it is impracticable…

A:

Q: Which of the following would cause periodic ending inventory to be overstated?

A: Note - the answer has been provided on the basis of information available in question. If any…

Q: Describe the effects of misstatement of ending inventory.

A:

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

A:

Q: Why would a "Just in Time" inventory management practice be preferred over a "Just in Case inventory…

A: Just in Time Inventory Management:- It is the inventory technique where labor, material, and other…

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: What factors contribute to (or cause) inventory shrinkage?

A: Shrinkage: The cost of the difference between the recorded inventory value and physical count of…

Q: Which of the following is not a reason for the physical inventory count to differ from what…

A: Inventory is one of the important current asset of the business. This can be in form of raw…

Q: Explain Inventory Estimation Techniques.

A: Inventory Estimation Techniques:

Q: Would the writing down of obsolete inventory be recorded in a special journal or the general…

A: Journal: A journal can be defined as the historical record of the financial transactions. Documents…

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: An inventory roll-forward is a kind of inventory management. Exactly what kind of forward-looking…

A: Introduction:      It is the systematic production of new reporting periods' accounts using (rolling…

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: Explain Potential Misstatements- Inventory/ Cost of Goods Sold and the description of misstatements…

A: Internal control is a procedure for insuring that an organization's objectives in operational…

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.