USA Inventory

[JessicaHellen]

Hi everyone. I am a new accountant at a shop. Our inventory has a lot of discrepancies and I am currently working on fixing those. Although I am struggling and have few questions that some of you might be able to help me.

Situation 1: I have some quantity missing. Say my software has 3 but physically I only have 2. If I fix it through the manual count completely solve the situation or do I need to journalize something else? What if its the other way around, that my software says I have 2 but physically I have 4?

My concern is how I can keep track of costs and how much $ we are losing with all this discrepancies and how all of that will affect our books.

Highly appreciate already,

Jessica.

 

[kirby]

Firs off, if these are low dollar items then request approval from your manager to record the gain or loss in the accounting books and be done with this.
But for large dollar items, (get your manager's approval before taking these steps) more investigation is needed. If expensive inventory is missing then ask the inventory manager for a written report to memorialize the difference. Then write it off in the books.
If more inventory is on hand, then review the physical inventory cut off procedures to see if this is the source of the problem (this also applies to the missing inventory). Bottom line you need to do some investigating before making an entry.