Accounting Grade 12 Inventory Valuation And Internal Control Questions and Answers

December 11, 2023 ajiraforum Grade 12

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Accounting Grade 12 Inventory Valuation And Internal Control Questions and Answers

Accounting Grade 12 Inventory Valuation And Internal Control Questions and Answers This is for the Accounting Grade 12 course. The Grade 12 study content for Analysis and interpretation of financial accounts can assist you with your Accounting Subject Revisions, Tests, Exams, and Assignments.

Accounting Grade 12 focuses on performance measurement as well as the processing and communication of financial information concerning economic sectors. This discipline ensures that ethical behavior, openness, and accountability are followed. As a Grade 12 Accounting student, you will be responsible for the logical, systematic, and accurate selection and recording of financial information and transactions, as well as the compilation, analysis, interpretation, and communication of financial statements and managerial reports to interested parties.

An effective internal control structure for inventory includes a company’s plan of organization and all the procedures and actions it takes to:

Protect its assets against theft and waste.
Ensure compliance with company policies and federal law.
Evaluate the performance of all personnel to promote efficient operations.
Ensure accurate and reliable operating data and accounting reports.

Makro Stores sells television sets to the public. The financial year ended on 28 February 2019. They are unsure which method to use in valuing their stock. The cost price of the products has changed significantly during the current year. The owner Naidoo, has decided to keep selling the same model of TV set (Ekasi TV sets), despite the fact that other shops are now selling newer models.

Calculate the value of closing stock using the FIFO (first-in-first-out) method.
Calculate the value of closing stock using the weighted average method.
Which method of stock valuation would you advice the owner to use? Explain your answer.

Stock Records:	Number of TV Sets	Cost per unit	Total value
TV sets on hand on 1 March 2018	50	R11 000	R550 000
TV Sets bought during the year	750		R8 090 000
May 2018	300	R12 000	R3 600 000
September 2018	250	R11 560	R2 890 000
February 2019	200	R8 000	R1 600 000
Sub total	800		R8 640 000
TV sets sold during the year	440	R16 000	R7 040 000
TV sets on hand on 28 February 2019	360	?	?

Apart from TV sets, Makro Stores also sell other products. You are provided with information taken from their stock records on 28 February 2019. The owner Naidoo is uncertain if he should be satisfied with control of all these items.

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