Bookstore Inventory
The university Bookstore has eight different departments: new books (dept. 1), used books (dept. 2), clothing (dept. 3), supplies (dept. 4), gifts (dept. 5), computers/electronics (dept. 6), magazines/food ( dept. 8), and trade books ( dept. 9). Note there is no dept. 7 currently in use. A physical inventory count is conducted once annually on each of these departments. Not all departments’ inventories are performed on the same date; the dates are staggered throughout the year. The university’s Internal Audit department observes the inventory count performed by Bookstore personnel.
The physical inventory values are communicated to Accounting Services in order to calculate and record an adjustment of the book inventory to actual inventory. If the difference between the existing inventory on the books and the physical count is greater than 2% of sales (standard for the industry), then Accounting Services investigates the difference to ensure that the reason for the variance is valid, or to determine if an error was made, or a transfer of inventories took place between departments prior to the count date.


