Accounting Tools

DECEMBER 18, 2023

Consequently, substantive procedures are designed to obtain audit evidence about the data produced by a client’s accounting system - specifically, in regard to its accuracy, completeness, and validity. Doing so can provide assurance that internal recordation systems are performing as planned.

Auditing 75

Auditing Financial Statements Financial Records Accounts Payable 75

Accounting Tools

NOVEMBER 2, 2023

Related Courses Accounting for Inventory How to Audit Inventory What is Backflush Accounting? Backflush accounting is when you wait until the manufacture of a product has been completed, and then record all of the related issuances of inventory from stock that were required to create the product.

Accounting 75

Accounting Accounting Billing Computation 75

Accounting Tools

OCTOBER 22, 2023

Related Courses Accounting for Inventory Inventory Management What is Stock Taking? Stock taking is the counting of on-hand inventory. There may also be a verification step, where the count results are compared to the inventory unit counts in a company's computer system.

Computation 75

Computation Reconciling Auditing Cost Accounting 75

Accounting Tools

OCTOBER 3, 2023

Related Courses Accounting for Inventory How to Audit Inventory What is the Purchases Account? The purchases account is a general ledger account in which is recorded the inventory purchases of a business. This account is used to calculate the amount of inventory available for sale in a periodic inventory system.

General Ledger 40

General Ledger Accounting Accounting Auditing 40

Accounting Tools

JUNE 12, 2023

Related Courses Accounting for Inventory How to Audit Inventory How to Account for a Consignment Consignment occurs when goods are sent by their owner (the consignor ) to an agent (the consignee ), who undertakes to sell the goods. It may also be useful to occasionally conduct an audit of the inventory reported by the consignee.

Accounting 75

Accounting Accounting Record Keeping Accounts Payable 75

Accounting Tools

FEBRUARY 12, 2024

An asset is an expenditure that has utility through multiple future accounting periods. If it has no value, then it cannot be recorded in an organization’s accounting system. Second, it must be a long-term resource to its owner, so that it is expected to generate economic benefits for several future periods. What are Assets?

Deposits 75

Deposits Accounts Receivable Accounts Receivable Account Receivables 75

Accounting Tools

JUNE 11, 2023

The cost of sales is calculated as beginning inventory + purchases - ending inventory. Example of the Cost of Sales A company has $10,000 of inventory on hand at the beginning of the month, expends $25,000 on various inventory items during the month, and has $8,000 of inventory on hand at the end of the month.

Cost Accounting 75

Cost Accounting Accounts Payable Accounts Payable Bookkeeping 75

Accounting Tools

AUGUST 1, 2023

Related Courses Accounting for Inventory How to Audit Inventory Inventory Management What is Perpetual FIFO? Perpetual FIFO is a cost flow tracking system under which the first unit of inventory acquired is presumed to be the first unit consumed or sold.

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

JULY 21, 2023

Related Courses Accounting for Inventory Cost Accounting Fundamentals Inventory Management Many business dictionaries state that there is no difference between the terms work in process and work in progress , so it is possible to interchange the terms. Related Articles Ending Work-in-Process Formula Work-in-Process Accounting

Cost Accounting 75

Cost Accounting Accounting Accounting 75

Accounting Tools

AUGUST 4, 2023

Related Courses Accounting for Inventory How to Audit Inventory Inventory Management What is Perpetual LIFO? The basic concept underlying perpetual LIFO is the last in, first out (LIFO) cost layering system. Under LIFO, you assume that the last item entering inventory is the first one to be used.

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

JULY 17, 2023

Related Courses Accounting for Inventory How to Audit Inventory Inventory Management What is the Cost of Inventory? Inventory cost includes the costs to order and hold inventory , as well as to administer the related paperwork. Inventory costs can be classified as follows.

Cost Accounting 70

Cost Accounting Payroll Auditing Tax 70

Accounting Tools

SEPTEMBER 25, 2023

Related Courses Accounting for Inventory How to Audit Inventory What is Ending Inventory? Ending inventory is the cost of those goods on hand at the end of a reporting period. The aggregate cost of this inventory is used to derive the cost of goods sold of a business that uses the periodic inventory system.

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

SEPTEMBER 20, 2023

Related Courses Closing the Books The Soft Close The Year-End Close How to Automate the Cutoff An intensely manual process at the end of each reporting period is the cut off of incoming inventory items. This system works well unless the receiving staff incorrectly enters transactions in the wrong period.

Purchase Order 40

Purchase Order Computation Invoicing Accounting 40

Accounting Tools

SEPTEMBER 21, 2023

Related Courses Accounting for Inventory How to Audit Inventory Inventory Management What is a Perpetual Inventory System? Under the perpetual inventory system, an entity continually updates its inventory records in real time. We describe these advantages below.

Accounts Payable 40

Accounts Payable Accounts Payable Data Entry Record Keeping 40

Accounting Tools

APRIL 29, 2024

Out of stock is an inventory condition, stating that an item is not currently available for sale or use. When inventory is not available, a business may offer to sell a comparable item, or will backorder goods until they are available at a later date. What is Out of Stock? Here are some of the most common: Insufficient safety stock.

Accounting 40

Accounting Accounting 40

Accounting Tools

APRIL 12, 2024

As part of the closing process, the accounting staff may engage in the following reconciliation activities: Reconcile the bank statement Reconcile balance sheet accounts to the supporting detail Reconcile inventory records to on-hand balances (if a periodic inventory system is used) Reconciliations are considered an important control activity.

Reconciling 40

Reconciling General Ledger Account Reconciliation Bookkeeping 40

Accounting Tools

AUGUST 7, 2023

Related Courses Accounting for Inventory Inventory Management What is an ABC Inventory System? An ABC inventory system classifies all inventory items into three categories. All inventory items in the “C” classification are rarely used and usually have a low unit cost.

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

OCTOBER 6, 2023

Related Courses Accounting Controls Guidebook A system of internal control has five components. An accountant must be aware of these components when designing an accounting system , as does anyone who audits the system. The components of an internal control system are noted below.

Financial Statements 75

Financial Statements Auditing Accounting Accounting 75

Accounting Tools

SEPTEMBER 23, 2023

Related Courses Accounting for Inventory How to Audit Inventory What is Physical Inventory? Physical inventory is an actual count of the goods in stock. This can involve counting, weighing, and otherwise measuring items, as well as asking third parties for counts of inventory items that have been consigned to them.

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

OCTOBER 1, 2023

Related Courses Accounting for Inventory Ending inventory is a key requirement when a business is closing its books. Thus, without an accurate ending inventory figure, it is impossible to determine a firm’s profitability. It is needed to derive the cost of goods sold , which in turn is needed to calculate profits.

Accounting 40

Accounting Accounting 40

Accounting Tools

DECEMBER 8, 2023

The cost of goods available for sale is the total recorded cost of beginning finished goods or merchandise inventory in an accounting period, plus the cost of any finished goods produced or merchandise added during the period. This information is used to derive the cost of goods sold for any reporting period.

Cost Accounting 40

Cost Accounting Accounting Accounting 40

Accounting Tools

JUNE 14, 2023

Related Courses Accounting for Inventory How to Audit Inventory How to Conduct an Audit Engagement What are Inventory Audit Procedures? If your company records its inventory as an asset and it undergoes an annual audit , then the auditors will be conducting an audit of your inventory.

Auditing 75

Auditing General Ledger Reconciling Invoicing 75

Accounting Tools

JANUARY 12, 2024

The cost accountant must also construct and monitor the data accumulation systems needed to provide an appropriate level of costing information to management. Also, consider including a requirement to have knowledge of LIFO , FIFO , or standard costing, based on the system that the company is using.

Cost Accounting 40

Cost Accounting Accounting Accounting Budgeting 40

Accounting Tools

OCTOBER 20, 2023

Related Courses Accounting for Inventory How to Audit Inventory What is the Inventory Ledger? An inventory ledger is a document or computer record that tracks inventory transactions. Depending upon the type of usage, an inventory ledger can be considered a subsidiary ledger of the general ledger.

General Ledger 40

General Ledger Computation Auditing Accounting 40

Accounting Tools

SEPTEMBER 3, 2023

Online processing is the ongoing entry of transactions into a computer system in real time. The opposite of this system is batch processing, where transactions are allowed to pile up in a stack of documents, and are entered into the computer system in a batch.

Computation 40

Computation Accounting Software Accounting Accounting 40

Accounting Tools

DECEMBER 22, 2023

During this period, the bottleneck instead uses parts from its inventory buffer, which is therefore depleted. The extra sprint capacity is then used to produce an extra-large quantity of parts to rebuild the inventory buffer, in preparation for the next period of production downtime.

Budgeting 40

Budgeting Accounting Accounting 40

Accounting Tools

NOVEMBER 3, 2023

Related Courses Accountants' Guidebook Bookkeeping Guidebook The accrual basis of accounting is used to record revenues and expenses in the period in which they are earned, irrespective of the timing of the associated cash flows. Do not include expenses for any accounts payable that were not actually paid in cash during the period.

Accruals 75

Accruals Accounting Accounting Accounts Payable 75

Accounting Tools

OCTOBER 11, 2023

The following discussion of accounting basics is needed to give you a firm grounding from which to understand how an accounting system works and how it is used to generate financial reports. System of Record Keeping First, there must be a rational approach to record keeping. Examples are accounts receivable and inventory.

Accounting 75

Accounting Accounting Record Keeping Purchase Order 75

Accounting Tools

OCTOBER 6, 2023

Related Courses Accounting for Inventory How to Audit Inventory What is the Dollar-Value LIFO Method? In essence, the method aggregates cost information for large amounts of inventory , so that individual cost layers do not need to be compiled for each item of inventory.

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

AUGUST 24, 2023

Related Courses Accounting for Inventory Inventory Management What are Holding Costs? Holding costs are the costs incurred to store inventory. Depreciation Cost The company incurs a depreciation charge in each period for all storage space, racks, and equipment that it owns in order to store and handle inventory.

Payroll 40

Payroll Tax Accounting Accounting 40

Accounting Tools

SEPTEMBER 8, 2023

Related Courses Business Ratios Guidebook Inventory Management Purchasing Guidebook What is the Reorder Level Formula? The reorder level formula is that inventory level at which an entity should issue a purchase order to replenish the amount on hand. Thus, the reorder level is 100 units x 8 days = 800 units.

Purchase Order 40

Purchase Order 40

Accounting Tools

OCTOBER 27, 2023

Product Costs Cost accounting compiles the cost of raw materials , work-in-process , and finished goods inventory , while financial accounting incorporates this information into its financial reports (primarily into the balance sheet ). Report Timing Financial accounting personnel issue reports only at the end of a reporting period.

Financial Accounting 75

Financial Accounting Cost Accounting Accounting Accounting 75

Accounting Tools

JULY 16, 2023

Related Courses Accounting for Inventory How to Audit Inventory What is a Materials Ledger Card? Materials ledger cards are not used in computerized warehouse management systems, and so are not commonly found in organizations having more advanced systems.

Auditing 40

Auditing Accounting Accounting 40

Accounting Tools

OCTOBER 28, 2023

Related Courses Accounting for Inventory How to Audit Inventory What is the Moving Average Inventory Method? Under the moving average inventory method, the average cost of each inventory item in stock is re-calculated after every inventory purchase. on April 12, and finally revises its unit cost to $6.10

Computation 40

Computation Auditing Accounting Accounting 40

Accounting Tools

JUNE 18, 2023

Related Courses Accounting for Inventory How to Audit Inventory There are a number of inventory journal entries that can be used to document inventory transactions. Nonetheless, you may find a need for some of the following entries from time to time, to be created as manual journal entries in the accounting system.

Accounts Payable 40

Accounts Payable Accounts Payable Accounts Receivable Accounts Receivable 40

Accounting Tools

JULY 26, 2023

Related Courses Business Ratios Guidebook Inventory Management The Interpretation of Financial Statements What is Days Inventory Outstanding? Days inventory outstanding measures the average number of days required for a business to sell its inventory.

Financial Statements 40

Financial Statements 40

Accounting Tools

JUNE 19, 2023

A post-closing trial balance is a listing of all balance sheet accounts containing non-zero balances at the end of a reporting period. This is one of the last steps in the period-end closing process. It will likely not contain "Post Closing Trial Balance" in the header, since few accounting computer systems use this designation.

General Ledger 75

General Ledger Computation Accounts Payable Accounts Payable 75