Example of perpetual inventory procedure, Accounting Basics

Assignment Help:

Q. Example of perpetual inventory procedure?

The Perpetual inventory procedure Companies use perpetual inventory procedure in a range of business settings. In the past companies that sold merchandise with a high individual unit value such as furniture, automobiles and appliances used perpetual inventory procedure. Today computerized cash scanners, registers and accounting software programs automatically keep track of inflows and outflows of each inventory item. Computerization composes it economical for many retail stores to use perpetual inventory procedure even for goods of low unit value such like groceries.

Under perpetual inventory method the Merchandise Inventory account provides close control by showing the cost of the goods that are imaginary to be on hand at any particular time. Companies debit the Merchandise Inventory account for every purchase and credit it for each sale therefore that the current balance is shown in the account at all times. Habitually firms as well maintain detailed unit records showing the quantities of each kind of goods that should be on hand. Company personnel as well take a physical inventory by actually counting the units of inventory on hand.


Related Discussions:- Example of perpetual inventory procedure

Final accounts, stpes to be taken prepaing for final accounts

stpes to be taken prepaing for final accounts

Trading and profit and loss account, state why carriage inwards is stated o...

state why carriage inwards is stated on the trading account

Ethical perspective - world auto parts corporation, John Bentley is the chi...

John Bentley is the chief financial officer for World Auto Parts Corporation the company buys approximately USD 500 million of auto parts every year from small suppliers all over t

Explain the term- reversing entries and interim statements, Explain the ter...

Explain the term- Reversing entries and Interim statements Reversing entries - Made the first day of new accounting period. They are exact opposite of the adjusting entries

When a not-for-profit facility receives a contribution from, When a not-for...

When a not-for-profit facility receives a contribution from a member of the community, the cost of the capital is inconsequential when deciding how to use the contribution, becau

Determine how the disallowance of lifo, determine how the disallowance of L...

determine how the disallowance of LIFO will impact U.S. multinational firms that report under IFRS

Explain double-entry procedure, Q. Explain double-entry procedure? The ...

Q. Explain double-entry procedure? The double-entry procedure maintains the accounting equation in balance. The dual recording process generates two sets of accounts those with

Preparing financial statements for a merchandising business, Preparing fina...

Preparing financial statements for a merchandising business (The statements are completed in this order.) 1.  Income Statement (contains only expenses and revenue and show

Accounting theory, explain the proceedure followed in government system of ...

explain the proceedure followed in government system of accounting in india

Management, Management: Organizations may not or may exist for the sole re...

Management: Organizations may not or may exist for the sole reason of profit. Though, information requires of the managers of both types of organizations are approximately the sam

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd