Inherent risk is often assessed as relatively high for inventory, because of the characteristic/s:
A) potential for obsolescence.
B) multiple storage locations.
C) complex pricing.
D) all of the above

Question

Quizplus · Accepted Answer

All the options (potential for obsolescence, multiple storage locations, and complex pricing) contribute to the inherent risk associated with inventory. Obsolescence can lead to write-offs and losses, multiple storage locations can increase the risk of theft, damage, or misplacement, and complex pricing can result in errors or manipulation. Therefore, all these characteristics make inventory inherently risky.

Inherent Risk Is Often Assessed as Relatively High for Inventory