Which is not an example for safeguarding inventory?
returning inventory that is defective or broken” is NOT an example of safeguarding inventory.
Which document establishes an initial record of the receipt of the inventory?
A purchase order establishes an initial record of the receipt of the inventory.
Which document establishes an initial record of the receipt of inventory vendor’s invoice receiving report petty cash voucher purchase order?
Which document establishes an initial record of the receipt of inventory vendor’s invoice receiving report petty cash voucher purchase order? The answer is receiving report.
The purchase order authorizes the purchase of the inventory from an approved vendor of the company.
What are safeguards for inventory?
Consider these 10 tips to help manage and protect your inventory.
- Lock and monitor inventory.
- Organize and label inventory.
- Leave a paper trail.
- Conduct cycle counts on a regular basis.
- Spot check the inventory list.
- Review your bill of materials.
- Look for obsolete inventory.
- Minimize movement at year-end.
When would you use a periodic inventory system?
Periodic inventory is a system of inventory valuation where the business’s inventory and cost of goods sold (COGS) are not updated in the accounting records after each sale and/or inventory purchase. Instead, the account is updated after a designated accounting period has passed.
Which account is used with a periodic inventory system?
The Merchandise Inventory account balance is reported on the balance sheet while the Purchases account is reported on the Income Statement when using the periodic inventory method. The Cost of Goods Sold is reported on the Income Statement under the perpetual inventory method.
What are the primary objectives of control over inventory?
The two primary objectives of inventory control are safeguarding the inventory from damage or theft and reporting inventory in the financial statements. These are accomplished by using a variety of control methods to maintain and inventory turnover.
Under Which method of cost flows is the inventory assumed to be composed of the most recent costs?
The LIFO (last-in, first-out) method of inventory costing assumes that the costs of the most recent purchases are the first costs charged to cost of goods sold when the company actually sells the goods.
What entry is required in the company’s accounts to record outstanding checks?
No entry is made to a company’s general ledger for outstanding checks when preparing a bank reconciliation. The reason is outstanding checks are an adjustment to the bank balance. Outstanding checks are not an adjustment to the company’s Cash account in its general ledger.
What entry is required in the depositor’s accounts to record outstanding checks?
What entry is required in the company’s accounts to record outstanding checks? No entry is required. In a bank reconciliation, checks issued that have not been paid by the bank are added to the balance according to the bank statement.
When using the FIFO inventory costing method the most recent costs are assigned to the cost of goods sold?
When using the FIFO inventory costing method, the most recent costs are assigned to the cost of goods sold. If the perpetual inventory system is used, the account entitled Merchandise Inventory is debited for purchases of merchandise.