Taking a Physical Count of Inventory

question 67

Multiple Choice

Taking a physical count of inventory

• A) is not necessary when a periodic inventory system is used
• B) should be done near year-end
• C) has no internal control relevance
• D) is not necessary when a perpetual inventory system is used

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Definitions:

Maturity Date

The date on which a financial obligation must be repaid or a bond or other instrument reaches its expiration and the principal is due back to the investors.

Note Receivable

A claim or debt that one party owes to another under the terms of a promissory note, indicating money to be received.

Perpetual Inventory System

An inventory management system where records of inventory quantities are updated on a continuous basis as transactions occur.

Journal Entries

Records of financial transactions in the order in which they occur, used to transfer information to the ledger accounts.