Inventory Accounting

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“Inventory Accounting Frequently Asked Questions by expert members with experience in Inventory Accounting. These questions and answers will help you strengthen your technical skills, prepare for the new job test and quickly revise the concepts”



40 Inventory Accounting Questions And Answers

1⟩ Define account in accounting?

A account is the method used to visualize the debit credit accounting procedure. The account can represent any account regardless of expense, revenue, asset, or liability. The debits are placed the left side and the credits on the right.

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2⟩ Why financial accounting necessary?

Yes, the accounting calculates the cost of capital to the business. It compares the current, expected, and historic rates of return. Suppose a company is making 12% returns but borrowing money by using the owner's credit card at 22% be good to know that.

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3⟩ Described fair value accounting?

Fair Value accounting is an accounting term that requires a company to place a value on all of the assets on its balance sheet that, it is the price at which the assets could be sold. This is easy to do when the asset has a quoted market price. However, it is often the case that there is no liquid market for an asset, and thus the company has to make an estimate of fair value. When the marketplace is in turmoil and illiquid, as it has been for much of 2008, companies are sometimes forced to place a very low value on an asset, resulting in a substantial markdown from the prior value. See related links for complete explanations.

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4⟩ What is accounting?

Accounting is a method or system used to keep track of and determine the financial status of a person or company's income/assets and outlay of money/possessions. (An Accountant engages in Accounting: "The occupation of maintaining and auditing records and preparing financial reports for a business"

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5⟩ Why you want to be an accountant?

Stereotypical answer to this question is that accountancy offers a respected professional qualification which can lead on to a wide range of opportunities in business. This is all true, but it doesn't answer the question of why YOU want to become an accountant - and if you give as general an answer as this, you can expect to be questioned in detail on the nature of the qualification and the opportunities you see it leading to.

Much of the income of the larger accountancy firms now comes from consultancy and related services rather than from audit. Even in audit you will spend much of your time visiting clients and asking questions, so good interpersonal skills are important. Your answer to this question should probably make this point.

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6⟩ Explain the difference between Accounting and Marketing?

Accounting has to do with the company finances. Marketing has to do with company public relations, advertising, and product placement. The difference is accounting only deals with financial figures where marketing works on creating those figures.

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7⟩ Who created SnapIt accounting?

SnapIt accounting was developed in South Africa by Joe Schoemann Systems.

System Analysis: Joe Schoemann

Programming: Danny Schoemann

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9⟩ Described Executive Accounting?

Executive Accounting is designed for service type businesses that require a sophisticated accounting system, yet simple to use accounting system. Executive Accounting contains many advanced features such as three styles of invoicing (service, distribution and recurrent), multi-currency capabilities, multiple bank account capabilities and other powerful features. Executive is a single-user system that can be upgraded to an unlimited number of users.

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11⟩ What are different Branches of accounting?

For information, accounting field could be divided into a few branches, which is as follows:

i) Management Accounting

ii) Financial Accounting

iii) Taxation,

iv) Auditing

Management Accounting is consider a future prediction on the business cost which will be useful for the management (internal users) to make their decision, projection, planning and control their business activity.

The example of the M.A reporting consists of Sales Budget Report, Projection P & L for the year, Monthly Performance Review Report, etc.

The format is not standardized from one business to another and it will be more depending to the need and requirement of the company.

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12⟩ Described the importance of accounting standards?

Financial statements are prepared to summarize all business activities by an enterprise during an accounting period in monetary terms & report financial outcomes in terms of performance, status of assets, liabilities, & flow of cash. These business activities vary from one enterprise to other on one hand and size & volume of business on the other hand. To compare the financial statements of various reporting enterprises poses some difficulties because of the divergence in the methods and principles adopted by these enterprises in preparing their financial statements. In order to make these methods and principles uniform, comparable, transparent, establish accountability, and bring true & fair view of Financial Statement - Accounting Standards are evolved.

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13⟩ Described the definition of accounting?

The theory and system of setting up, maintaining, and auditing the books of a firm; art of analyzing the financial position and operating results of a business house from a study of its sales, purchases, overhead, etc.

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14⟩ Described partnership accounting?

A business can be a corporation, a partnership, or a sole proprietorship. A corporation is incorporated at the state level. A sole proprietorship is one person in business. A partnership is two or more persons with an agreement on who has which assets and liabilities and income. Partnership accounting is doing the books for the partnership. For IRS purposes, a partnership return must be filed each year.

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16⟩ Described accounting period?

This concept defines the unit of time for which accounting data are collected. It is hard to calculate and measure the profit if the business is trading for long periods. Therefore, accountants estimate profitability in the short segments of time that we call Accounting periods.

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18⟩ Which are the different fields of accounting?

There is one field of accounting, but there are many different jobs within the field such as auditor, bookkeeper, payroll accountant, cost accountant, tax accountants, etc. Accountants wear many hats and often do different tasks for different clients.

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19⟩ Described about the accounting transaction?

A transaction is an execution of a user program and is seen by the DBMS as a series or list of actions. The actions that can be executed by a transaction include the reading and writing of database.

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20⟩ Which are different branches of accounting?

Financial accounting refers to accounting for revenues, expenses, assets, and liabilities. It involves the basic accounting processes of recording, classifying, and summarizing transactions.

- Cost accounting is the branch of accounting dealing with the recording, classification, allocation, and reporting of current and prospective costs.

- Managerial accounting is the branch of accounting designed to provide information to various management levels in the hospitality operation for enhancing controls.

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