Department cost accounting procedures. The inventory must absorb the difference between the original cost of the items and the proceeds from the disposition. The difference is recovered by an overhead charge on all future inventory sold. Self-Funded Accounting will prepare journal entries to delete obsolete, surplus or damaged items from the general ledger based on authorization from the Purchasing Department. Verifying Inventory Year-end inventory count and valuation must be made as of close of business on June 30 or adjusted to that time.
Procedures are as follow.
Arrange merchandise and consumables to be inventoried in a neat and orderly manner. This will provide for more efficient and accurate physical counts. Prepare a diagram of the inventory location in sufficient detail to give each counter, shelf, bin, farm area, etc., an identification number. Include all merchandise received prior to the start of the inventory count regardless of the scheduled date of delivery. For example, if a shipment was requested for July 8, but delivered June 25, the merchandise is included in the June 30 count.