Inventory Manager Question:

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☛ How is inventory recorded on the general ledger? Is a reconciliation performed which ensure that all inventory held is recorded?
☛ In cases where materials were returned due to unsatisfactory quality, how is this communicated to accounting? How is this recorded?
☛ What is the process followed to track inventory items that are on consignment?
☛ How often are the inventory count results reconciled to the general ledger?
☛ If discrepancies are noted during the cycle count, how is this communicated to accounting? Who is responsible for making adjustments to the system for discrepancies noted during the cycle count process? What accounts are used in the journal entry transaction?
☛ Who is authorized to create and post any adjusting journal entries? What level of management review is required prior to posting the journal entries? What system controls are in place to prevent unauthorized access to the G/L?
☛ How are cycle counts validated by accounting?
☛ Is the period end cut off date communicated to shipping, receiving, customer returns and accounts payable to ensure accurate inventory records?
☛ Are unrealized losses accounted for on work in process products by periodically comparing total costs-to-date and estimated costs-to-complete to net realizable value (estimated selling price less reasonably predictable costs of completion & disposal)?
☛ What is the process followed to estimate and account for inventory reserves (e.g., aged inventory, obsolete inventory, etc.)? Are there any policies written for this procedure? Who is responsible for preparing and posting the journal entry?
☛ How is the disposal of obsolete or excess inventory communicated to accounting? How is the disposal recorded?
☛ How ensure that the inventory aging is correct when items (e.g., from cancelled orders) are restocked? How is the restocking of such items communicated to accounting?