Valuation of inventory (note only 2 procedures were required)
For a sample of invoices received from oil suppliers/ other suppliers vouch the cost of goods to invoices.
Discuss method of cost approximation used with management (for example average cost) and compare to current oil prices to ensure that the use of a cost approximation is appropriate.
For a sample of shop sales made post year end, agree sales price to invoices to confirm the net realisable value of inventory is greater than cost. |
