Why Is a Physical Count of Supplies Necessary at the End

question 90

Essay

Why is a physical count of supplies necessary at the end of the accounting period?

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Definitions:

FOB Destination

In this shipping term, the seller retains the risk of loss until the goods reach the buyer's location.

FOB Shipping Point

This refers to a shipping term where the buyer assumes responsibility for the goods the moment they leave the seller’s premises.

Accounts Payable

A liability account that records amounts the company owes to suppliers or creditors for purchases or services received on credit.

Physical Inventory Count

A physical inventory count is the process of manually counting all merchandise or stock in a business to verify records and manage inventory levels.