Which internal control procedure is followed when a physical count of inventory is performed in a perpetual inventory system?
A) Segregation of duties
B) Safeguarding assets and records
C) Independent verifications
D) Proper authorizations

Question

Quizplus · Accepted Answer

In a perpetual inventory system, inventory records are updated continuously. Therefore, performing a physical count of inventory is important to verify the accuracy of the records. Independent verifications, such as comparing the physical count to the recorded count, help ensure the reliability of the inventory records. Segregation of duties, safeguarding assets and records, and proper authorizations are also important internal control procedures, but they are not specifically related to the physical count of inventory in a perpetual inventory system.

Which Internal Control Procedure Is Followed When a Physical Count