The Objective of Internal Control That Minimizes Waste, Which Lowers

question 68

Multiple Choice

The objective of internal control that minimizes waste, which lowers costs and increases profits is:

• A) operational efficiency.
• B) asset safeguards.
• C) cost minimization.
• D) reliable accounting records.

---

Definitions:

Perpetual Inventory System

A perpetual inventory system is an accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

FIFO

First-In, First-Out, an inventory valuation method where the oldest items are sold first.

Ending Inventory

The value of goods available for sale at the end of an accounting period which is not yet sold.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a specific period, indicating efficiency in inventory management.