Limit access to inventory supply and implement procedures for receiving and shipping. Top Establishing Physical Inventory Controls A cost-of-goods-sold transaction is used to transfer the cost of goods sold to the operating account. Inventory purchases are recorded on the operating account with an Inventory object code, and sales are recorded on the operating account with the appropriate sales object code. Generally, units should have an inventory accounting system that tracks purchases and sales of the units’ inventory and allows units to calculate cost of goods sold, which must be transferred to the operating account. Top Establishing an Inventory Tracking System Note: See the object code list below for a detailed list of object codes (with their names and descriptions) used to record and adjust your inventory and cost of goods sold. The Inventory object code (asset) is used to record inventory value, reconcile inventory value after a physical inventory is performed, and transfer cost of goods sold to the inventory operating account. The sales operating account is used to record sales of inventory to customers, reconcile inventory value after performing a physical inventory, and record other expenses related to the sale and operation of the inventory. Adjust the General Ledger Inventory BalanceĮstablishing a Sales Operating Account (Current Fund, GNDEPT).A physical inventory must be done annually. Departments receiving revenue (internal and/or external) for selling products to customers are required to record inventory. Inventory can be any physical property, merchandise, or other sales items that are held for resale, to be sold at a future date. Inventory is an asset and it is recorded on the university’s balance sheet. Please enhance your critical accounting estimate disclosures to more fully explain the material assumptions you used to estimate reserves, quantify the impact these assumptions had during each period, and discuss the impact potential changes in these assumptions could have on future results.If you have questions about inventories, contact Accounting. We note your disclosures related to inventory valuation.Please tell us and disclose in an accounting policy footnote the specific types of amounts included in cost of sales, operating expenses and general and administrative expenses.Refer to ASC 330-10-50-1 and paragraph 6 of Rule 5-02 of Regulation S-X. Please disclose the basis of stating inventories and consider disclosing the major classes of inventories in future filings.Please tell us how your presentation complies with the guidance in SAB Topic 11:B, as gross profit appears to represent a figure for income before depreciation. You present cost of goods sold exclusive of depreciation and amortization expense along with the subtotal, gross profit.Please tell us how your accounting policy is consistent with ASC 330-10-35-1B, which indicates that inventories should be measured at the lower of cost or net realizable value. We note from your disclosure that you use the lower of cost (determined using the first-in, first-out method) or market for valuing inventories.Transfers and servicing of financial assets Revenue from contracts with customers (ASC 606) Loans and investments (post ASU 2016-13 and ASC 326) Investments in debt and equity securities (pre ASU 2016-13) Insurance contracts for insurance entities (pre ASU 2018-12) Insurance contracts for insurance entities (post ASU 2018-12) IFRS and US GAAP: Similarities and differences Business combinations and noncontrolling interestsĮquity method investments and joint ventures
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