Sr. C: What comes into your mind when your hear the word Inventories?

A: Inventories are assets ; held for sale or distribution in the ordinary course of operations

Sr. C: What is your understanding with the Semi-expendable Property?

A: Tangible items below the capitalization threshold of P15,000 (est. life more than 1yr)

Sr. C: Define current replacement cost and net realizable value

A: replacement cost: The cost the entity would incur to acquire the asset on the reporting date.

A: NRV: The estimated selling price in the ordinary course of operations, less the estimated costs of
completion and the estimated costs necessary to make the sale, exchange, or distribution AND net
amount that an entity expects to realize from the sale.

Sr. C: Determine the classification of inventories

A: Inventories are classified into four; Inventory Held for Manufacturing, Inventory Held for Sale,
Inventory Held for Distribution and Inventory Held for Consumption

Sr. C: What are the methods of accounting for inventories?

A: PERIODIC & PERPETUAL inventory system

Sr. C: When we say perpetual, how it is being done?

A: Perpetual inventory system, system that continually tracks all additions to and
deletions from inventory requires the Supplies Ledger Card and Stock Card

Sr. C: Between the two, what is the method adopted by the National Government Agencies

A: The perpetual inventory method

Sr. C: When can we say that the inventories are impaired?

A: Said to be impaired if the cost of inventories held for sale is higher than the net realizable value
or the cost of inventories held for distribution or consumption is higher than the current
replacement cost. Difference between the cost and net realizable value/current replacement cost
shall be recognized as an expense in the financial statement
Estimated Selling Price less Estimated Cost of Disposal

Estimated Selling Price

LESS: Estimated Cost of Disposal
NRV

Sr. C: what are the forms and reports we have in inventories?

A: Stock Card (SC), Supplies Ledger Card (SLC), Requisition and Issue Slip (RIS), Purchase
Request (PR), Purchase Order (PO), Report of Supplies and Materials Issued (RSMI), Waste
Materials Report (WMR), Report on the Physical Count of Inventories (RPCI), Inspection and
Acceptance Report (IAR), Report of Accountability for Accountable Forms (RAAF), Inventory
Custodian Slip (ICS)

Sr. C: The procedures in the receipt, inspection, acceptance and recording of inventory items, do you
still remember it? A: MAHABA HAHAHA