Why is a physical inventory of existing fixed assets carried out on a regular basis?
A) To check that the assets are used in more than one period.
B) To check that the assets do physically exist.
C) To check that the assets are properly depreciated.
D) None of these.

Question

Quizplus · Accepted Answer

A physical inventory of existing fixed assets is carried out on a regular basis to verify that the assets do physically exist. This helps to prevent fraud or errors in the accounting records. Option A is incorrect as the usage of assets is not verified through a physical inventory. Option C is also incorrect, as verifying depreciation is typically done through accounting records and calculations, not a physical inventory. Option D is incorrect as there are reasons, such as fraud prevention, for conducting physical inventories of fixed assets.

Why Is a Physical Inventory of Existing Fixed Assets Carried