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A First check the account records and valuation amount of inventory in books
B inspect physical inspection of inventory and count the inventory with books record
C Third Match your results A & B with Supplier statement if you have or confirm with Supplier invoices
the above process will make sure you have authenticate internally document and as well externally via supplier data.
A Company can apply the periodically stock count cycle based on their transaction voulme to identify OR verified the Stock accuracy with System vs Actual.
Set of Process:
1) Run a Cycle count on Periodically basis and submit this report to Management to identify the mismatch and accurate the system.
2) if any stock found MISMATCH, Identify the product and match with last stock to catch the difference/mistakes.
3) Company/Organization need to set a process where, GOODS INWARAD to OUTWARD each process should be recorded with responsibility/accountability.
Item 2 and 4You have to have a stock take quarterly, semi annualy and annualy based on reproting requirement. Also reposibility shall lie with warehouse manager given he is given matching authority, staff, technology and tools along with secure premises.
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The basis of accounting is systematics and consistency in action. It uses some form of physical inventory count – either annual or cyclical.
Answer number 4 is correct, the main target here is to ensure that the amount at the counting are the same at the records. Then we should decide the methodology of this assertion through either with the Periodic Method inventory as to count all the items at the end of each period, Or Perpetual Method, which is counting quarterly up to the end of the year.
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By using internal control system and internal control check.
The primary and best method to match the inventory records with physical inventory in the store is to perform a periodic inventory count and that must be carried out by any other person who was not responsible for record keeping of it. in this we can ensure the inventory in good condition and that which is damaged and is not in resellable condition.
It uses some form of physical inventory count and then it holds warehouse manager accountable for any Discrepencies/Variances.
