23 Jul WHAT FINANCIAL STATEMENT RATIOS WILL BE IMPACTED AND HOW?
Since it is year-end, you have asked your manager what process they have been using to complete a physical inventory of parts and finished goods. Your manager tells you that a physical inventory count has never done before and doesn’t believe it to be necessary because everyone always keeps good records of what is used and sold. Address the following questions and concerns in your discussion:Explain to your manager why a physical inventory count is required, and how often it should be done. Without completing a proper physical inventory account, what impact will there be on the income statement? Balance sheet? What financial statement ratios will be impacted and how?
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