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Inventory method that least likely mimics actual physical flow of inventory?
Wiki User
∙ 11y ago
FIFO method where the older items are sold first.
Wiki User
∙ 11y ago
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An auditor selected an inventory item on the warehouse floor test counted it and traced the count to the final inventory compliation The auditor most likely was testing the?
The Auditor was maybe testing the warehouse inventory counts and who maybe in control on the inventory control
What is the inventory system in accounting?
Inventory system is more likely recorded in the Balance Sheet section in accounting. It will not be at the Profit and Loss section.
What companies would be more likely to use the specific identification inventory costing method?
walmart
How does inventory affect taxes?
To some extent, this answer depends on where you live, but here are a few answers: - if you possess inventory that you do not expect to be able to sell, it can often be written down/off - if you possess inventory because a customer ordered it but did not make payment, the unpaid account can be written down less the value of the resale on the item - if the inventory has lost value over time (eg. electronics) then you may be able to claim some capital cost allowance (aka depreciation) - obviously, investing in inventory is a business expense and should be noted as such, so that it is likely your tax bill will be far lower in your business's first year(s). Overview:A solid system of inventory will make it possible to find the perfect balance between stock on hand and stock needed. If you are operating your company with a high inventory then you will most likely be paying more taxes. You can minimize the amount of taxes due each period by implementing a successful inventory management system.
How does Inventory contribute to company Profit?
Inventory is a balance sheet item. Costs added to inventory stay in inventory until the items are sold. There are many different ways to allocate these costs, at the discretion of the company. When items are sold, an allocation representing these items is moved from inventory to cost of sales (a.k.a. costs of goods sold) which becomes a cost for the period, match against an allocation of revenues for the period, which gives a figure for gross profit. Watch for trends in inventory from period to period, allowing for seasonality, and the gross margin (gross profit as a percent of revenues). The biggest thing to watch for is an unwarranted increase in inventory, which could indicate obsolescence, poor planning, or high returns. If inventories are too high, they are likely eventually to be written off.
An auditor selected an inventory item on the warehouse floor test counted it and traced the count to the final inventory compliation The auditor most likely was testing the?
The Auditor was maybe testing the warehouse inventory counts and who maybe in control on the inventory control
What is the inventory system in accounting?
Inventory system is more likely recorded in the Balance Sheet section in accounting. It will not be at the Profit and Loss section.
Which type of organization would most likely have work-in-process inventory?
manufactoring
list and explain audit procedures for inventory in transit?
Audit Procedures Cutoff analysis. Observe the physical inventory count. Reconcile the inventory count to the general ledger. Test high-value items. Test error-prone items. Test inventory in transit. Test item costs. Review freight costs. Cutoff analysis. The auditors will examine your procedures for halting any further receiving into the warehouse or shipments from it at the time of the physical inventory count, so that extraneous inventory items are excluded. They typically test the last few receiving and shipping transactions prior to the physical count, as well as transactions immediately following it, to see if you are properly accounting for them. Observe the physical inventory count. The auditors want to be comfortable with the procedures you use to count the inventory. This means that they will discuss the counting procedure with you, observe counts as they are being done, test count some of the inventory themselves and trace their counts to the amounts recorded by the company's counters, and verify that all inventory count tags were accounted for. If you have multiple inventory storage locations, they may test the inventory in those locations where there are significant amounts of inventory. They may also ask for confirmations of inventory from the custodian of any public warehouse where the company is storing inventory. Reconcile the inventory count to the general ledger. They will trace the valuation compiled from the physical inventory count to the company's general ledger, to verify that the counted balance was carried forward into the company's accounting records. Test high-value items. If there are items in the inventory that are of unusually high value, the auditors will likely spend extra time counting them in inventory, ensuring that they are valued correctly, and tracing them into the valuation report that carries forward into the inventory balance in the general ledger. Test error-prone items. If the auditors have noticed an error trend in prior years for specific inventory items, they will be more likely to test these items again. Test inventory in transit. There is a risk that you have inventory in transit from one storage location to another at the time of the physical count. Auditors test for this by reviewing your transfer documentation. Test item costs. The auditors need to know where purchased costs in your accounting records come from, so they will compare the amounts in recent supplier invoices to the costs listed in your inventory valuation. Review freight costs. You can either include freight costs in inventory or charge it to expense in the period incurred, but you need to be consistent in your treatment - so the auditors will trace a selection of freight invoices through your accounting system to see how they are handled. Test for lower of cost or market. The auditors must follow the lower of cost or market rule, and will do so by comparing a selection of market prices to their recorded costs. Finished goods cost analysis. If a significant proportion of the inventory valuation is comprised of finished goods, then the auditors will want to review the bill of materials for a selection of finished goods items, and test them to see if they show an accurate compilation of the components in the finished goods items, as well as correct costs. Direct labor analysis. If direct labor is included in the cost of inventory, then the auditors will want to trace the labor charged during production on time cards or labor routings to the cost of the inventory. They will also investigate whether the labor costs listed in the valuation are supported by payroll records. Overhead analysis. If you apply overhead costs to the inventory valuation, then the auditors will verify that you are consistently using the same general ledger accounts as the source for your overhead costs, whether overhead includes any abnormal costs (which should be charged to expense as incurred), and test the validity and consistency of the method used to apply overhead costs to inventory.
Which type of organization would most likely have work in process inventory?
A manufacturing company
Which type of organization would most likely have work-in process inventory?
A manufacturing company
What companies would be more likely to use the specific identification inventory costing method?
walmart
How does inventory affect taxes?
To some extent, this answer depends on where you live, but here are a few answers: - if you possess inventory that you do not expect to be able to sell, it can often be written down/off - if you possess inventory because a customer ordered it but did not make payment, the unpaid account can be written down less the value of the resale on the item - if the inventory has lost value over time (eg. electronics) then you may be able to claim some capital cost allowance (aka depreciation) - obviously, investing in inventory is a business expense and should be noted as such, so that it is likely your tax bill will be far lower in your business's first year(s). Overview:A solid system of inventory will make it possible to find the perfect balance between stock on hand and stock needed. If you are operating your company with a high inventory then you will most likely be paying more taxes. You can minimize the amount of taxes due each period by implementing a successful inventory management system.
What is the meaning of '3c' marked on the buttplate of a French m1842 musket?
Most likely a inventory or unit marking.
What production is likely in the Keynesian model whenever unplanned inventory increases occur in the economy?
Speed up
What type of businesses are likely to choose one system as against the other in the inventory system?
The system of naloge
If a firm uses just in time inventory system what effect is that likely to have on the number and location of suppliers?
Companies using a just-in-time inventory system will need to have their vendors close by. They will also need to have a lot of vendors and suppliers.
