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.
periodic inventory system
once
Yes
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.
To record the purchase of physical inventory: Dr. inventory Cr. cash To record sale of physical inventory: Dr. cost of goods sold Cr. inventory
periodic inventory system
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.
once
Yes
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.
To record the purchase of physical inventory: Dr. inventory Cr. cash To record sale of physical inventory: Dr. cost of goods sold Cr. inventory
Physical inventory refers to the actual inventory in the warehouse. Inventory refers to completed products, not work in progress or raw materials.
Physical inventory is a process where a business physically counts its inventory. It may be mandated by financial accounting rules.
Yes, along with FIFO and LIFO, Weighted average is a generally accepted accounting principle.
Physical inventory refers to the actual inventory in the warehouse. Inventory refers to completed products, not work in progress or raw materials.
NOP. Physical inventory counts are always needed to verify accuracy of records.
The fieldwork standards address what is required when actually performing the audit work.