Importance of inventory

Although for most legal entities the inventory is only a legal obligation, and not such a dear part of business activities, the importance of the inventory should be emphasized.

The main task of the inventory is to show the true and real state of assets, liabilities and capital of the company, and allows timely detection of omissions or fraud during business. The importance of conducting an inventory is reflected in aligning the book balance with the actual state of assets and liabilities.

The legal entity is obliged to make an inventory of assets and liabilities at the beginning of business as well as at least once a year with the balance on the day when the business year or some other accounting period ends, in order to determine their actual balance, and to make adjustments in the business books. actual balance with the book balance.

In order for a legal entity to complete the census as soon as possible and without difficulties, good organization is needed. The inventory process is carried out through six basic phases:

Preparatory actions include the process of appointing a census commission, preparing census sites, preparing assets that will be the subject of the census, and drawing up a plan and instructions for conducting the census;
Conducting a census involves determining, measuring, counting assets and liabilities and entering the actual situation in the census lists;
Comparison of bookkeeping and actual situation and determination of inventory differences (surpluses and deficits);
Compiling a report on the conducted census;
Making a decision on how to deal with identified inventory differences;
Accounting records that include appropriate accounting entries.
Who is liable for the annual census? What precedes the census? What is listed? Tax treatment of identified inventory differences?

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