Identify One Way to Improve the Accuracy of Inventory Records

question 46

Multiple Choice

Identify one way to improve the accuracy of inventory records that use a perpetual inventory approach

• A)use of an ERP system
• B)require the accounting department to calculate cost of goods sold periodically
• C)use IT to eliminate the need for manual data entry
• D)use of an MRP inventory system

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Definitions:

Retained Earnings

The portion of net earnings not distributed as dividends to shareholders, but retained by the company to reinvest in its core business or to pay debt.

Contributed Surplus

Contributed Surplus is an equity account that reflects excess amounts received by a company over the par value of its stock from the sale of shares directly to investors.

Common Shares

Equity investments that represent ownership in a company, granting holders voting rights and a share in the company's profits through dividends.

Non-Current Liability

Liabilities not due within one year or the operating cycle of the business, reflecting long-term financial commitments.