ProcessPhysical Inventory of Prepaid Expenses

 

The commission may audit your accounts to make sure that you have recorded your prepaid expenses correctly. If so, you can print out a list of the prepaid expenses you have recorded to date so that they can compare them with the primary documents. You then make adjustment postings for any discrepancies identified during the audit.

Process

  1. You print the physical inventory of prepaid expenses document (INV-11).

    This document lists all the prepaid expenses that are recorded in Financial Accounting (FI).

  2. The commission carries out the physical inventory.

    During physical inventory, the commission compares the data in the primary documents with the data in the inventory document. If they find differences, they enter these manually on the inventory document.

  3. The accountant posts the differences in the system.

    There is no need to print the INV-11 form as a difference list.