The Purpose of a Work-In-Process Inventory Is To

question 68

Multiple Choice

The purpose of a work-in-process inventory is to:

• A) provide the materials needed to make the product.
• B) enable overall production to be divided into stages of manageable size.
• C) reduces the organization's investment in storage space.
• D) provide ready supply of products on customer demand and enable long, efficient production runs.
• E) distribute products to customers.

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Definitions:

Internal Control Objectives

The goals or purposes of systems and processes designed to safeguard assets, ensure accurate financial reporting, and promote operational efficiency.

Inventory Storeroom

A designated area where materials or goods are stored until they are needed for production or sales.

Subsidiary Ledgers

Detailed ledgers that contain information supporting accounts listed in the general ledger, such as customer and vendor details.

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.