Freije Refrigeration Company has an inventory of raw materials and parts consisting of thousands of different items which are of small dollar value individually but significant in total.A fundamental control requirement of Freije's inventory system is that:
A)Perpetual inventory records be maintained for all inventory items
B)The taking of physical inventories be conducted on a cycle basis rather than at year?end
C)The storekeeping function not be combined with the production and inventory record?keeping functions
D)Material requisitions be approved by an officer of the company

Question

Quizplus · Accepted Answer

Separating the storekeeping function from production and inventory record-keeping functions helps prevent fraud and errors, ensuring better control over inventory.

Freije Refrigeration Company Has an Inventory of Raw Materials and Parts