Some Inherent Questions on Material Management and Control

1. List up the more frequently used forms incident to the procurement and use of materials.

2. Should formal purchase requisitions and purchase orders be prepared for the purchase of incidental supplies, services, and repairs? Why?

3. How is an invoice approved for payment?

4. How an electronic data processing system (EDP), the computer — to a great extent replaces the accounting clerk? Explain.

5. Does the method of inventory costing have its principal effect on the balance sheet or on the income statement?

6. In costing materials received and placed in stock, should the cost of transportation, receiving, inspecting, and storing be added to the purchase price? State reasons.

7. An invoice for materials shows that a total of $5,400 ; terms : 3 /10, n /30. If the purchaser elects to pay the invoice at the end of 30 days, what is the effective interest cost resulting from failure to take the discount ?

8. During periods of rapid increase or decrease in materials prices, which costing method might result in a more desirable profit for cost of goods manufactured and sold?

9. Discuss the advantages and disadvantages of the LIFO costing method. 

10. A company maintains a perpetual inventory control system. Is it also necessary to take an annual year-end inventory?

11.At times physical quantities of materials as determined by actual count and inspection do not agree with the figures in materials ledger cards. What may cause such discrepancies? What accounting steps are taken to adjust the differences?
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