For Companies That Use a Perpetual Inventory System, All of the Following

question 122

Multiple Choice

For companies that use a perpetual inventory system, all of the following are purposes for taking a physical inventory except to:

• A)check the accuracy of the records.
• B)determine the amount of wasted raw materials.
• C)determine losses due to employee theft.
• D)determine ownership of the goods.

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Definitions:

Collateral

An asset pledged as security for repayment of a loan, forfeitable in the event of a default.

Unsecured Loans

Loans that are provided without requiring collateral from the borrower.

Loan Obligation

A legal commitment or responsibility to repay borrowed funds, including any accumulated interest.

Carrying Value

Carrying value, also known as book value, is the value of an asset as reflected in an entity's accounting records, minus any depreciation, amortization, or impairment costs.