Depending on the circumstances, the Judge may or may not grant that request. You should ask the IRS attorney if he or she will agree with the request for continuance and you should let the Tax Court know if there is any objection. The Judge may or may not grant your request for continuance.
If differences exist, then adjustments should be made to get the accounting counts to match the warehouse counts. A full physical inventory is usually performed when all inventory movements are stopped to ensure better accuracy. Cycle counts represent a procedure to validate inventory quantity in the accounting system through regular partial counts.
For example, if the beginning inventory is $100, purchases during a period are $500, and the physical inventory count at the end of a period is $200. Then credit purchases by $500 to zero-out the account debit inventory by $100 ($200 - $100) and debit cost of goods sold by $400 ($100 + $500 - $200). 1  Companies usually do a physical count only once a year because it is a time-consuming and expensive process.