Cycle Counting

question 60

Multiple Choice

Cycle counting:

• A) is a process by which inventory records are verified once a year.
• B) eliminates annual inventory adjustments.
• C) provides a measure of inventory turnover.
• D) assumes that all inventory records must be verified with the same frequency.
• E) assumes that the most frequently used items must be counted more frequently.

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Definitions:

Accounts Receivable Period

The average amount of time it takes for a company to receive payments owed by its customers for goods or services provided.

Inventory

The raw materials, work-in-progress products, and finished goods that a company holds for the purpose of sale in the future.

Cost of Goods Sold

Expenses directly linked to the creation of a company's sold products.

Sales

Sales refer to the transactions where goods or services are exchanged for money, representing the primary source of revenue for most businesses.