Physical inventory counts:
A)Are not necessary under the perpetual system.
B)Are necessary to determine differences between actual inventory available and the Inventory account balance.
C)Must be taken at least once a month.
D)Require the use of hand-held portable computers.
E)Are not necessary under the cost-to benefit constraint.

Question

Quizplus · Accepted Answer

Physical inventory counts are necessary to verify the accuracy of the Inventory account balance and to identify any discrepancies between the actual inventory available and the recorded balance. This is important to ensure that financial statements accurately reflect the company's true financial position. While physical inventory counts may not be required as frequently under the perpetual system compared to periodic system, they are still necessary at least once a year. Hand-held portable computers may be used to facilitate the process, but they are not a requirement. Cost-to-benefit constraint may be considered in deciding the frequency and scope of physical inventory counts, but they are still necessary.

Physical Inventory Counts