No one can deny the importance of assets in the business world. Because assets create profit and also grow the business from a low to a high level. Assets have different types, but the most important are current and fixed assets. Fixed assets work for a long period of time, and current assets work in […]
Why Don’t We Depreciate Inventory? (Explained) Read More »
Introduction: Inventory or stock-in-trade is the goods or commodities held by an entity for the purpose of resale or trade. At the end of an accounting year, companies usually have unsold goods in their warehouses which are referred to as closing inventory or closing stock-in-trade. This item is not reported in the income statement, but
How do Inventories Present in Statement of Cash Flow? Read More »
Overview: There are many audit procedures and approaches that auditors could use to perform during their detailed testing of the inventories report by management in the financial statements. Before going into detail on the procedure, it is good to start with the overview of inventories first. Inventories are the current assets that reporting in the
Auditing Inventories: Procedures, Risks, Assertion, and More Read More »
What is inventory Inventories are items or assets that are held for selling to customers but not for internal use in business. Inventories are the entity’s assets that report in the financial statements are current assets on the balance sheet. The recognition of inventories in the financial statements of the entity is similar to the
When should inventories recognize in financial statements? Read More »
Definition: Physical verification is the procedure the auditor normally performs to confirm the existence of certain physical assets that are recorded in the client’s financial statements. Most of the assets that auditors verified are fixed assets and inventories. The auditor might also use this procedure to confirm the condition of those assets. The physical verification
Physical Verification of Fixed Assets and Inventories Read More »
Overview: Auditors generally observe the inventory count performed by the client at the end of the year or accounting period. Most of the accounting book is closing at the end of the calendar year, and normally entity performs a full inventory count to assess the actual quantity and calculate the exact amount of inventory closing
Inventory Observation (Objective and Explanation) Read More »
History of Just In Time (JIT): Just In Time, called TOYOTA Manufacturing Production System, is part of the Lean Manufacturing Production System. There is a long story before becoming the Just-In-Time that we know today. Eli Whitney first initiated the Just In Time concept in 1799, who had a large contract with the U.S. Army at
Just-In-Time: History, Objective, Productions, and Purchasing Read More »