Which of the Following Statements Regarding Inventory Counts Is Not

question 149

Multiple Choice

Which of the following statements regarding inventory counts is not correct?

• A)Companies need to perform a physical count of their inventory at least yearly regardless of which inventory system is being used.
• B)A perpetual inventory system does not require a physical count during the accounting period to determine cost of goods sold.
• C)In a perpetual inventory system,the inventory count is compared to the inventory account balance to reveal shrinkage.
• D)If a company uses a perpetual inventory system and the inventory count at the end of the accounting period is greater than the balance in the inventory ledger account,there must have been shrinkage.

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Definitions:

Skepticism

An attitude of doubt or a disposition to incredulity either in general or toward a particular object; questioning the validity of a particular claim, theory, or belief.

Pride

A feeling of deep pleasure or satisfaction derived from one's own achievements, the achievements of those with whom one is closely associated, or from qualities or possessions that are widely admired.

Practicality

The aspect of being concerned with the actual doing or use of something rather than with theory and ideas.

Empirical Approach

A method of gaining knowledge through direct observation, experience, or experimentation, emphasizing evidence-based conclusions.