Which of the Following Control Activities Would Most Likely Be

question 54

Multiple Choice

Which of the following control activities would most likely be used to maintain accurate perpetual inventory records?

• A)Independent storeroom count of goods received.
• B)Periodic independent reconciliation of control and subsidiary records.
• C)Periodic independent comparison of records with goods on hands.
• D)Independent matching of purchase orders, receiving reports, and vendors' invoices.

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Definitions:

Direct Materials

Raw materials that can be directly associated with the production of specific goods or services and are included in the cost of the finished product.

Fixed Overhead

The total of all costs that do not vary with production volume, including salaries, rent, and insurance.

Variable Overhead

Costs that fluctuate with production volume, such as utilities and indirect materials, which are not constant like fixed overhead costs.

Direct Labor

Labor costs directly attributable to the production of goods, including wages of workers who are actively involved in the manufacturing process.