Internal Controls That Should Be Applied When a Business Takes

question 120

Multiple Choice

Internal controls that should be applied when a business takes a physical count of inventory should include all of the following except:

• A)Prenumbered inventory tickets.
• B)A manager confirms that all inventories are ticketed only once.
• C)Counters confirm the validity of inventory existence,amounts,and quality.
• D)Second counts by a different counter.
• E)Counters of inventory should be those who are responsible for the inventory.

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Definitions:

Variable Costing

An accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs.

Product Costs

The costs directly associated with the creation of a product, encompassing direct materials, direct labor, and manufacturing overhead.

Variable Manufacturing Costs

Costs that vary directly with the volume of production, such as raw materials and direct labor.

Manufacturing Overhead

The collective costs associated with the production process that cannot be directly traced to specific units produced, including indirect materials, labor, and other overhead expenses.