Comparing Quantities on a Vendor Invoice to Quantities on the Receiving

question 62

Multiple Choice

Comparing quantities on a vendor invoice to quantities on the receiving report would not prevent or detect which of the following situations?

• A)receiving and accepting inventory not ordered
• B)theft of inventory by receiving department employees
• C)update of wrong inventory items due to data entry error
• D)order for an excessive quantity of inventory

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Definitions:

Economic Order Quantity

A formula used to determine the most efficient quantity to order to minimize the costs associated with buying, holding and stockout.

Carrying Costs

Expenses associated with holding or maintaining an inventory, including storage, insurance, and taxes.

Fixed Costs

Expenses that do not change in total regardless of the level of production or sales activity.

Child's Toy

Any item designed for use in play by children, often to provide entertainment while also encouraging learning and development.