Asked by Julia Ellinghaus on Jun 09, 2024
Verified
A company's unadjusted balance in Inventory will usually not agree with the actual amount of inventory on hand at year-end.
Unadjusted Balance
The initial balance of an account before any adjustments or corrections are made for accounting purposes.
Inventory
includes goods and materials a business holds for the purpose of resale or as part of its production process.
Year-End
The end of a financial year, a period used for accounting purposes and preparing financial statements.
- Master the concepts of perpetual and periodic inventory systems and their implications for accounting documentation.
Verified Answer
JP
Jesus PachekoJun 13, 2024
Final Answer :
True
Explanation :
The unadjusted balance in Inventory only reflects the amount of inventory recorded in the company's accounting books, but it does not account for any adjustments needed due to shrinkage, spoilage, or other factors that may affect the physical inventory count. Therefore, it is likely that the unadjusted balance in Inventory will not match the actual amount of inventory on hand at year-end.
Learning Objectives
- Master the concepts of perpetual and periodic inventory systems and their implications for accounting documentation.