0
GAAP stands for generally accepted accounting principles, and a physical inventory is needed when using GAAP. One reason it is necessary is, if you don't account for your shrinkage by doing a physical count, your total ending inventory costs will be inflated.
Wiki User
∙ 15y ago
Add your answer:
Earn +20 pts
What methods do not require a physical inventory periodic inventory system perpetual inventory method retail method or gross profit method?
periodic inventory system
How often can a company change its inventory valuation methodology and still be compliant with GAAP?
once
Does gaap require statement of cash flows?
Yes
Is the moving average inventory method GAAP?
Moving average inventory method is not GAAP (generally accepted accounting principles). LIFO (last in, first out) or FIFO (first in, first out) are GAAP. FIFO is the most common method and easy to compute; however LIFO may be used but is much more complicated to compute unless your businesses computer system computes the LIFO computation.
Journal entry to record physical inventory?
To record the purchase of physical inventory: Dr. inventory Cr. cash To record sale of physical inventory: Dr. cost of goods sold Cr. inventory
What methods do not require a physical inventory periodic inventory system perpetual inventory method retail method or gross profit method?
periodic inventory system
What is the GAAP method for determining what inventory is obsolete or slow moving?
The GAAP method for obsolete or slow moving inventory is to account for all inventory using either market value or cost method. The method which results in the lower amount is the one that is used.
How often can a company change its inventory valuation methodology and still be compliant with GAAP?
once
Does gaap require statement of cash flows?
Yes
Is the moving average inventory method GAAP?
Moving average inventory method is not GAAP (generally accepted accounting principles). LIFO (last in, first out) or FIFO (first in, first out) are GAAP. FIFO is the most common method and easy to compute; however LIFO may be used but is much more complicated to compute unless your businesses computer system computes the LIFO computation.
Journal entry to record physical inventory?
To record the purchase of physical inventory: Dr. inventory Cr. cash To record sale of physical inventory: Dr. cost of goods sold Cr. inventory
What does the term Physical Inventory?
Physical inventory refers to the actual inventory in the warehouse. Inventory refers to completed products, not work in progress or raw materials.
Why physical inventory?
Physical inventory is a process where a business physically counts its inventory. It may be mandated by financial accounting rules.
Is weighted average inventory valuation GAAP?
Yes, along with FIFO and LIFO, Weighted average is a generally accepted accounting principle.
What does the term Physical Inventory represent?
Physical inventory refers to the actual inventory in the warehouse. Inventory refers to completed products, not work in progress or raw materials.
Will switching to a perpetual inventory system eliminates the need for a physical inventory count?
NOP. Physical inventory counts are always needed to verify accuracy of records.
What do the fieldwork standards under GAAP require?
The fieldwork standards address what is required when actually performing the audit work.
