Identify internal control procedures that would be used to maintain accurate inventory records.

Question

Want to see the full answer?

Answer 1

Question

Chapter 21, Problem 13.2MCQ

To determine

Identify internal control procedures that would be used to maintain accurate inventory records.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

For each statement below, identify whether the statement applies to the periodic inventory system, the perpetual inventory system, or both. Periodic inventory system, Perpetual inventory system, or Both? a. Normally used for relatively inexpensive goods. b. Keeps a running computerized record of merchandise inventory. c. Achieves better control over merchandise inventory. d. Requires a physical count of inventory to determine the quantities on hand. e. Uses bar codes to keep up-to-the-minute records of inventory.

What is the main distinction between perpetual and periodic inventory systems? Which type of system providesbetter internal control over inventory? Explain why.

1. What is the primary reason we perform physical inventory observations? A. To obtain sufficient appropriate audit evidence over the existence and condition of inventory to meet the objectives of the professional auditing standards B. To obtain sufficient appropriate audit evidence that inventory is recorded at the correct cost on the financial statements C. To provide assurance over the time it takes inventory to leave the warehouse and arrive at the customer D. To verify assumptions used in management's estimates regarding inventory reserves 2. What piece of information gained during the understanding of the inventory process would be LEAST relevant to the scoping of inventory locations? A. The company hired a new count supervisor for one of their largest locations B. Book to physical adjustments were material in the prior year for 2 locations C. Cycle count accuracy rates have been greater than management's targets in the prior year and current year to date D. WIP inventory takes…