Which of the Following Internal Control Activities Most Likely Addresses

question 23

Multiple Choice

Which of the following internal control activities most likely addresses the completeness assertion for inventory?

• A)The work-in-process account is periodically reconciled with subsidiary inventory records.
• B)Employees responsible for custody of finished goods do not perform the receiving function.
• C)Receiving reports are prenumbered and the numbering sequence is checked periodically.
• D)There is a separation of duties between the payroll department and inventory accounting personnel.

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Definitions:

Machine-Hours

A measure of the amount of time that machinery is in operation, typically used as a basis for allocating manufacturing overhead costs.

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead costs to products based on a predetermined formula, often involving estimated costs and activity levels.

Machine-Hours

A measure of production volume or activity based on the number of hours machines are operating.

Unused Capacity

Unused capacity represents the available but unutilized production or service capability of a company, which if used, could potentially increase output without increasing fixed costs.