The safeguarding of inventory most likely includes
A) Comparison of the information contained on the purchase requisitions, purchase orders, receiving reports, and vendors' invoices.
B) Periodic reconciliation of detailed inventory records with the actual inventory on hand by taking a physical count.
C) Analytical procedures for raw materials, goods in process, and finished goods that identify unusual transactions, theft, and obsolescence.
D) Application of established overhead rates on the basis of direct labor hours or direct labor costs.

Question

Quizplus · Accepted Answer

Safeguarding of inventory involves ensuring that the inventory is protected from theft, damage, or loss. Periodic reconciliation of detailed inventory records with the actual inventory on hand by taking a physical count is a common method for safeguarding inventory. This helps identify any discrepancies, theft or loss, and allows for the correction of any issues. A, C, and D are not related to safeguarding inventory.

The Safeguarding of Inventory Most Likely Includes