Problem description:

In accounting, what exactly are inventory surplus and inventory deficit? I smiled when I was a beginner in accounting. Please give me your advice.

Analysis:

Inventory surplus means that there are more physical objects than correct book records, which may be due to the fact that some physical objects are generated based on weather and temperature, such as "cotton", that is, managers make more material consumption orders and suppliers send more. Inventory loss refers to the fact that the physical objects are less than the correct book records due to theft and managerial mistakes (repeated occurrence, careless accounting and inadequate discovery). When inventory gains and losses are found, they are recorded in the "property gains and losses to be processed" account first, and then the reasons are found out for corresponding accounting treatment. If the compensation paid by the insurance company is recorded as "other receivables" payable to the management personnel, or as "other receivables", it is recorded as "management expenses".