Perpetual Inventory Master Files Maintained by Persons Who Do Not

question 37

Multiple Choice

Perpetual inventory master files maintained by persons who do not have custody of or access to assets are a useful cost accounting control, because:

• A) they are a record that can be used to pinpoint responsibility for custody when there are differences between physical counts and amounts shown on records.
• B) they provide a record of items on hand, which is used to initiate production or acquisition of additional materials or goods.
• C) they provide a record of the use of raw materials and sale of finished goods, which can be reviewed for obsolete or slow-moving items.
• D) all of the above

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Definitions:

Synchronization of Cash Flows

The strategic timing of income and expense cash flows to ensure liquidity and optimize financial performance.

Cash Management

The strategy for managing a company's or an individual's financial operations, such as collecting, investing, and managing cash and liquid assets.

Outsourcing

The practice of purchasing components rather than making them in-house.

Intermediate Components

Components or parts used in the production process that are not final products but are incorporated into other goods.