The Three Groups of Application Controls Are Batch Controls, Run-To-Run

question 30

True/False

The three groups of application controls are batch controls, run-to-run controls, and audit trail controls.

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Definitions:

Periodic Inventory

A method of inventory valuation where updates to the inventory levels and cost of goods sold are made at the end of an accounting period.

Inventory Balance

The total value of a company's inventory at the end of an accounting period, including raw materials, work-in-progress, and finished goods.

Inventory Turnover Distortion

A situation where the calculated rate of inventory turnover does not accurately reflect a business's actual efficiency in managing inventory.

LIFO Liquidation

The process of selling older inventory that was valued under the Last-In, First-Out method, which can affect taxation and financial reporting.