Osocheep Supermarkets Ltd have a main depot and five large supermarkets. Their financial year end is Thursday

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Osocheep Supermarkets Ltd have a main depot and five large supermarkets. Their financial year end is Thursday 31 March 2X11 and inventory is to be evaluated as at the close of business on that date. The next day is an exceptionally busy one with much business in terms of deliveries from supplier, movements of in- ventory, and sales. The sales margins are narrow and it is very important to obtain an accurate figure for inventory. Goods in inventory in the warehouse are kept on a continuous inventory system (quantities only) on a computer with a printout of the previous day's inventory available at noon each day. The inventory at branches is not recorded continuously. The bulk of the inventory is carried in the back rooms and moved onto the supermarket shelves continuously during the day.

Questions:-

What are the problems in this case re:

a) cut-off

b) inventory identification and quantity determination

c) valuation?

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Related Book For  book-img-for-question

Auditing

ISBN: 9780134613116

10th Edition

Authors: Alan Millichamp, John Taylor

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