A Physical Count of Inventory Is Required Even Though the Company

question 201

Multiple Choice

A physical count of inventory is required even though the company uses the perpetual inventory system. This is an example of which of the following internal control activities?

• A)segregation of duties
• B)safeguarding of assets and records
• C)checks on recorded amounts
• D)clearly defined authority and responsibility

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Definitions:

Price Sensitivity

The degree to which the demand for a product or service is affected by changes in its price, illustrating consumer response to price adjustments.

Consumer Surplus

The contrast between what buyers are willing to offer for a good or service and the amount they actually spend.

Willingness to Pay

The maximum amount an individual is prepared to expend on a good or service to acquire it.