When There Is a Difference Between the Inventory Records Quantity

question 97

Multiple Choice

When there is a difference between the inventory records quantity and the physical count of inventory:

• A)There is a variance.
• B)The difference can be ignored if minor.
• C)The difference is resolved through inventory reconciliation.
• D)The difference is ignored if the physical quantity exceeds inventory record quantity.

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Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset, over its useful life, up to the current date.

Salvage Value

The estimated value that an asset will realize upon its sale at the end of its useful life, used in calculating depreciation.

Discarded

Discarded refers to items or substances that have been thrown away or disposed of, no longer deemed useful or necessary.

Equipment Cost

The total amount spent to acquire, install, and make ready for use a piece of equipment for operational purposes.