Balances
Balance sheets verify that the actual inventory of the assortment matches the inventory the company has on paper. By counting the number of items in the store and warehouse (or other form of storage), it can be checked.
On a company's balance sheet, assets (possessions) and liabilities (its financing) should be balanced. It is possible that the actual inventory differs from what it should be on paper. Possible causes include incorrect deliveries, incorrect processing of sold or returned items at the cash register, and theft.
Checking the inventory allows lost items to be written off and replenished where necessary so that the inventory again matches the records.
Many stores have a fixed balance day each year. By closing the store, one has the opportunity to check the inventory of all shelves in one day. Processing any losses, in addition to correcting inventory, is necessary for bookkeeping.
