Inventories – Flashcards
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Under a perpetual inventory system, the amount of each type of merchandise on hand is available in the
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Inventory Ledger
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Which document authorizes the purchase of the inventory from an approved vendor?
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The Purchase Order
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The primary objectives of control over inventory are
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Safe guarding inventory from damage and reporting inventory in the financial statements
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Taking a physical count of inventory
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Should be done near year end
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Control of inventory should begin as soon as the inventory is received. Which of the following internal control steps is not done to meet this goal?
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Check the invoice with the person who specifically purchased the item
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All of the following are documents used for inventory control except
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A petty cash voucher
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Which document establishes an initial record of the receipt of the inventory?
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Receiving report
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Which of the following is not an example for safeguarding inventory?
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Returning inventory that is defective or broken
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Which of the following methods is appropriate for a business whose inventory consists of a relatively small number of unique, high-cost items?
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Specific identification
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Ending inventory is made up of the oldest purchases when a company uses
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Last-in, first-out
