An effective method of internal control is periodically comparing/reconciling actual assets with accounting records.How is this most easily accomplished?
A)Physically count inventory and compare the value of the inventory with the market to ensure inventory is not devaluing.
B)Compare a physical count of inventory to purchase orders maintained in accounting files.
C)Compare what is recorded in the accounting records with the purchase orders maintained in the accounting files.
D)Physically count inventory on hand and compare it with what is recorded in the accounting records.

Question

Quizplus · Accepted Answer

Physically counting inventory on hand and comparing it with what is recorded in the accounting records is the most effective method of internal control for comparing/reconciling actual assets with accounting records. It ensures that the actual physical inventory matches with what is recorded in the accounting records, exposing any discrepancies or irregularities that may exist. Options A and B are only specific to inventory, while option C may not capture all the assets that need reconciliation.

An Effective Method of Internal Control Is Periodically Comparing/reconciling Actual