this is not my field, I have read many books, and I still don't understand anything about accounting. However I do
believetwo things regarding your issue.
1. If you have too little of anything (money inventory or otherwise) you would not reduce the original input (I don't
knowwhat you mean by shrinkage but I assume that is what you meant), but rather introduce an adjustment record (as I am
norwegianI do not know the proper english words for this).
2. You can adjust up as well. To illustrate it:
Product | Quantity | Date | Comment
Shoes | 100 | Juli 1. 2001 | Received shipment
Shoes | -1 | Juli 4. 2001 | Sold to customer
Shoes | -2 | Juli 5. 2001 | Sold to customer
Shoes | -1 | Juli 7. 2001 | Sold to customer
Sum | 96
Shoes | 2 | August 1. 2001 | Stock-Counting (98 shoes)
Sum | 98
This may not be what you wanted to know. If you have any good tips on books or websites about accounting please let me
know!
Regards,
Aasmund.
On Fri, 02 Nov 2001 22:31:05 -0500, Mike Mascari <mascarm@mascari.com> wrote:
> Hello.
>
> I have a quick accounting question. In the evaluation of Cost of
> Goods Sold, one can use 3 different methods for evaluating
> inventory: LIFO, FIFO, or Average Warehouse cost. In an application
> which allows the user to adjust inventory quantities, if the user
> discovers that the physical inventory in a cycle count is less than
> the electronic accounts, its easy to attribute the missing inventory
> as shrinkage. But what if the user discovers an on-hand quantity
> that is greater than the electronic accounts? For example:
>
> Jan 01, 2001 - Bought 1 Pencil for $3.00
> Jan 03, 2001 - Bought 1 Pencil for $3.50
> Jan 21, 2001 - Bought 1 Pencil for $4.50
>
> Total:
>
> 3 Pencils
> $11.00
>
> However, when the cycle count is performed on Jan 31, 2001, 2 more
> pencils are discovered. What do Generally Accepted Accounting
> Principles say regarding the value of the 4th and 5th pencils? If a
> sale of a pencil occurs on Feb 01, 2001, using LIFO, what is the
> COGS?
>
> Oliver?
>
> Sorry for the off-topic question. Any pointers would be greatly
> appreciated.
>
> Mike Mascari
> mascarm@mascari.com
>
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Aasmund Midttun Godal
aasmund@godal.com - http://www.godal.com/
+47 40 45 20 46