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Which assertion has tested when the auditors walked through the warehouse looking for obsolete inventory?
Wiki User
∙ 9y ago
valuation
Wiki User
∙ 9y ago
The assertion being tested when auditors walk through the warehouse looking for obsolete inventory is the existence assertion. This is to verify that the inventory physically exists and is recorded in the company's inventory records. Additionally, auditors may also be testing the valuation assertion to ensure that the inventory is appropriately valued on the financial statements.
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What is the GAAP method for determining what inventory is obsolete or slow moving?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.
What is the journal entry to record sale of obsolete inventory?
Debit cash / bankdebit loss (if any)Credit inventory account
What is an allegation?
An alleger is a person who alleges, especially formally.
How do record journal entry when the inventory is thrown away?
There are various ways to record a journal entry when the inventory is thrown away. The standard entry is to debit the cost of goods sold and credit the allowance for the obsolete inventory.?æ
What are the Advantages and disadvantages of keeping stock?
Advantages of high level of stocks are many like it provides a buffer to the companies against the high demands. If the prices of the products are expected to increase in future then a high level of inventory can also give a capital gain to the companies. High level of stocks can also eliminate the risk of fall of supply in the future. Shortages of goods in the market in future can be handled by keeping high levels of inventory. On the other hand, the main disadvantage of keeping high levels of finished products will increase the costs of the warehouse management. Secondly, if the prices of the finished goods are expected to fall then the company can get the capital loss. Poor inventory management can result in the loss of inventory like obsolete inventory problems.
Is inventory an asset or liability?
Basically Inventory is valuated an asset. You keep inventory to service your customers and to smoothen production by purchasing semi-finished stuff. Inventory ties up your working capital hence the objective is to return your investment as soon as possible. A good measurement is the ratio of inventory turnover. Inventory becomes a liability when the life cycle ends either by becoming obsolete/discontinued or by means of expiry. Write offs are valuated as liabilities.
How do you determine the value of Ending Inventory do you use the value the inventory was purchase at or the value of the inventory at the months end?
Hello - I use the value the inventory was purchased at. If you need to, then you can devalue the inventory by stating a write down on obsolete goods, or alternatively, product that you will have to take a discount on. Technically, you have a few options - LIFO (last in, first out), FIFO most common - First in, first out, and average - average is not GAAP in Canadian accounting, but is workable in the states. Hope this helps you!
What are the accounting journal entries to write off stock?
To write off stock in accounting, the journal entries would be to debit the inventory account and credit the expense account, such as "Inventory write-off" or "Loss on inventory write-off." Additionally, if applicable, debiting any allowance for obsolete or damaged inventory account and crediting the inventory account would be necessary. The total debit amount should equal the total credit amount in the journal entry.
Which is a better method LIFO or FIFO?
Generally, the oldest unsold or unutilized inventory items are classified as obsolete either partly or fully. Also, for certain deteriorating items the organisation would use them first to prevent deterioration.The accounting treatment for obsolete inventory is to write off amounts which impacts bottom line.However this premise may vary for some industries and certain types of products, eg. Wine... where appropriate batch is identified at the time of sale and accounted accordingly.In conclusion, generally FIFO is preferred but the choice of which method to use in business is dependent on the nature of the item of inventory and the industry.Hope this helps!Cheers...
What part of speech is the word obsolete in the sentence The room is obsolete?
Obsolete is an adjective.
How can the company benefit from warehouse management software?
Warehouse operating companies using old systems now need to future-proof your business and invest in Warehouse Management System Software that allows become more responsive to market need. To operate at peak efficiency as well reduce labor expenses and infrastructure costs implement a reliable WMS solution is set to play a big part. Warehouse management forms the central of supply chain management lifecycle. If your warehouse management processes become inefficient and inaccurate, it can derail your entire operation. In today’s situation of integrated logistics most organizations are owing a Warehouse Management Software for enhancing customer service. Logistics company & warehouse operators using Warehouse Management System can get to know improvement areas that need to be taken care about to take your business to another level. Time loss due to inefficient picking : Manual entry can also slow down your ability to create shipping labels and other documents. A WMS can help you address this main pain point by automating these works. Maintaining improper stock levels and buildups of obsolete inventory case picking problems & lost revenue. WMS lets streamlines the warehousing process & removes redundant processes that lowers productivity. Warehouse Space Utilization : Space is a finite resource, explosion in the variety of goods add to the operational woes. To quicken the pick-up, and shorten the lead times avoid lift truck drivers traveling time to the farthest reaches of the warehouse.Consider maximizing the use of space by streamlining dock-to-stock processes by deploying warehouse management system that systematically locates the products in relation to receiving, packaging, and shipping areas. Managing Warehouse data. The supply chain produces a large amount of data that first needs to be collected and then analyzed. WMS helps you get out from problems like overstocks, stock-outs and drill down into data which optimize your warehouse management practices and your profits. With WMS optimize all the warehouse processes and serve their customers with precise and accurate information. If you prefer adopting this innovative warehouse technology feel free to contact us. We’ll be happy to hear from you.
What is the abbreviation for obsolete?
OB is the abbreviation for obsolete.
