Inventory and COGS - Physical inventory
3 important questions on Inventory and COGS - Physical inventory
What should be done if a physical inventory reveals a material loss?
A special account for the loss or shrinkage expense should be created.
How should immaterial gains or losses in inventory be recorded year to year?
Immaterial differences can be charged to COGS.
How is inventory valued as an asset?
At the lower of cost or market (LCM) based on conservatism- the lowest value that is reasonable to use.
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