When the empties or containers in which goods necessarily have to be supplied are costly, the manufacturer normally agrees to purchase them back at a reduced price as compared to the one charged for them. This is normal business procedure.
If you want to verify this account, you have to check that:
- Separate account of issue and receipt of empties has been prepared.
- In separate maintained a/c check how many empties lies in warehouse and how many are with customers.
- Check how many empties customers may return after the close of the year.
- Check whether proper provision has been made against the contingency of the containers being returned by customers and that for the wear and tear.
- Check the amount of sale with entry in cash book.
- See the sold empties are reduced from the inventory.
- If the empties are sold on credit, ask for direct confirmation from purchasing party and confirm the sale.
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