Inventory Accounting at Wal Mart Stores.

From the annual reports we can conclude that Wal-Mart operates its stores as mass cut retailers, carrying between 60,000 and 90,000 different merchandise items in each store. Wal-Mart purchases more than than $22 meg in merchandise, turning its scrutinize everywhere as often as 4.5 times per year. Sam golf-club carries between 3,500 and 5,000 different merchandise items, acquiring more than $2.6 billion in merchandise. Wal Marts operations grew from 2003 to 2005. For example, the number of Wal-Mart stores increased and the number of Sams stores increased. WalMart utilized an extensive distribution and tracking system to maintain best inventories at each store. They use the retail last-in, send-off-out (LIFO) inventory write up mode for the Wal-Mart Stores segment, cost LIFO for the SAMS CLUB segment.

For both pecuniary reporting and tax purposes, Wal Mart used the accrual method of accounting and maintained a perpetual inventory system. on a lower floor the perpetual inventory system, the cost or measurement of goods interchange or purchased is contemporaneously recorded at the time of barter or purchase. The system continuously shows the cost or quantity of goods that should be on hand at any disposed(p) time. WalMart performed personal inventories to confirm the accuracy of the inventory as utter in the books, and made adjustments to the books to reconcile the book inventory with the bodily inventory.

WalMarts physical inventories were taken at its stores in rotation passim the year. They did not take physical inventories during the holi twenty-four hours season (November, December, and the first week of January). WalMart refers to this technique, which is common in the retail industry, as circle counting. Cycle counting is necessitated by the difficulty in conducting physical inventories at every store on the last day of the year. This technique also provides management with feedback on the effectiveness of its inventory management and...

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