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Inventory

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › Inventory

  • This topic has 1 reply, 2 voices, and was last updated 11 years ago by Ken Garrett.
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    Posts
  • March 30, 2014 at 6:16 am #163684
    nari
    Member
    • Topics: 261
    • Replies: 176
    • ☆☆☆

    Hello, regarding inventory testing ……when given a trial balance, the closing inventory balance is not stated IN the trial balance. When an auditor receives the TB from the client, those are the figures that are used as the population in calculating sample size. However, in most cases auditors receive a trial balance with the inventory included and it balances, could you please explain why?

    March 30, 2014 at 12:59 pm #163711
    Ken Garrett
    Keymaster
    • Topics: 10
    • Replies: 10597
    • ☆☆☆☆☆

    It will balance if closing inventory appears provided they have posted opening and closing inventory to cost of sales:

    Dr Cost of Sales
    Cr Inventory (opening inventory)

    Dr Inventory (closing inventory)
    Cr Cost of sales

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