Which of the Following Internal Controls Most Likely Would Be

question 303

Multiple Choice

Which of the following internal controls most likely would be used to maintain accurate inventory records?

• A) Perpetual inventory records are periodically compared with the current cost of individual inventory items.
• B) A just-in-time inventory ordering system keeps inventory levels to a desired minimum.
• C) Requisitions, receiving reports, and purchase orders are independently matched before payment is approved.
• D) Periodic inventory counts are used to adjust the perpetual inventory records.

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Definitions:

Depreciation

The process by which assets lose value over time due to wear and tear or obsolescence.

Savings

The portion of an individual's or entity's income that is not spent on current expenditures and is instead reserved for future use or investment.

Disposable Income

Money available to families for savings and expenses after accounting for income taxes.

C+ I

An economic term representing total consumption (C) and investment (I) in an economy, key components of the gross domestic product (GDP).