Inventory Testing Flashcards Preview

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Flashcards in Inventory Testing Deck (10):
1

Inventory included at the balance sheet physically existed

Existence

Observe Physical Count

2

Pledge or Assignment of inventory is appropriately disclosed

Classification and Understanability

Obtain confirmation of inventories

3

Entity has legal title

Rights & Obligations

Examine vendor invoices, agreements, contracts

4

Inventory are reduced to NRV when appropriate

Valuation & Allocation

Obtain current market value Quotes

5

Inventory listing are accurately compiled and totals are properly included in accounts

Completeness

Trace test counts recorded during physical inventory observation to inventory listing

6

Inventory quantities include all products on hand

Completeness

Observe physical inventory counts

7

Inventories are properly stated at Costs (Cost does not exceed Market value)

Valuation and allocation

Examine paid vendor invoices, agreements, contracts

8

Obsolete items included in inventory are properly identified

Valuation and allocation

Examine an analysis of inventory turnover

9

Inventory quantities include all products stored at outside locations

Completeness

Obtain confirmation of inventories

10

Inventories represent items held for sale or use in the normal course of business

Existence

Compare inventory with current sales catalog