Q1 /Identify two (2) common organisational procedures and practices a business may put in its policies and procedures manual to ensure it is maintaining inventory records in accordance with GAAP and accounting standards. You can include policies/procedures required to check the accuracy of inventory purchases, check the recording or coding of inventory transactions, check the accuracy of goods received or despatched, check the physical existence of the inventory or the compilation and valuation of the final amount that has been recorded in the accounting records for inventory.

2 organisational procedures/practices relating to inventory record keeping or inventory management that may be documented in an organisation'spolicies/procedures manual:

1.

2.

Q2/ Inventory Recording and valuation rules Continued

b) To be able to apply the inventory valuation rules identified in question 4a) above you need to understand the terms Cost and Net Realisable Value (NRV).

Explain the following terms in the table below.

Your answer should be a minimum of 10 words but no longer than 30 words each term.

Term

Explanation / Definition

Cost

Net Realisable Value

(NRV)