How do you account for inventory in the fund financial statements issued for noncentralized cafeteria funds?
At the onset of the single inventory method for accounting for purchased inventory and commodities, certain costing assumptions were not defined by either the US or TN Department of Agriculture. As a result, certain conventions have been established by the Division of Municipal Audit until the funding agencies set final policies. The easiest approach is to assume that all commodities are used before purchased inventory is used. This will generally result in ending inventory representing only purchased inventory and commodities inventory will by $-0-. Disclosure of the total commodities received and used should be disclosed in the notes to the financial statements.
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