Using the memo template, please define the management assertions for inventory. To help you get started here is an example using AR.

• Accounts Receivable

  Presentation - All account receivables-related transactions are recorded in proper AR accounts and sub-ledgers. E.g., if Sara orders something on credit it is debited to her subledger and not to Jim's.

  Disclosure - The information required in the account receivable footnote is included like the credit terms, critical customers, etc.

  Rights - All accounts listed in AR are the ownership of the company, conditions for recognition have been met and the assets have not been factored.

  Obligations - NA

  Existence - All AR transactions represent real sales with an exchange of goods or services to a legitimate customer.

  Completeness - All AR transactions have been recorded, there are no AR transactions that are missing.

  Valuation - All AR transactions are recorded at the amount they sold - historical sale amounts.

  Allocation - The allowance for doubtful accounts balance has been considered appropriate based on reliable estimates.