To Reduce the Risk of Allowing an Order to Proceed

question 8

Multiple Choice

To reduce the risk of allowing an order to proceed when goods are not available or rejecting an order when goods are available,it is important to:

• A)maintain accurate and timely perpetual inventory records and periodically conduct physical inventory checks.
• B)maintain accurate and timely perpetual inventory records and constantly conduct physical inventory checks.
• C)maintain accurate and timely periodic inventory records and periodically conduct physical inventory checks.
• D)maintain accurate and timely periodic inventory records and constantly conduct physical inventory checks.

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Definitions:

Operating Profits

Profits from a company's core business operations, excluding deductions of taxes and interest.

Regulation S-X

Rules and regulations set by the Securities and Exchange Commission (SEC) that dictate the form, content, and requirements of financial statements submitted by public companies in the United States.

Replacement Cost

The current cost of replacing an asset with a new one of the same kind and quality at current prices.

LIFO-to-FIFO Adjustment

A recalculation process that converts inventory valuation from the Last-In-First-Out (LIFO) method to the First-In-First-Out (FIFO) method, affecting cost of goods sold and inventory value.