A physical count of inventory is required even though the company uses the perpetual inventory system.This is an example of which of the following internal control activities?
A)Segregation of duties
B)Safeguarding of assets and records
C)Checks on recorded amounts
D)Clearly defined authority and responsibility

Question

Quizplus · Accepted Answer

This is an example of checks on recorded amounts. Even though the company is using a perpetual inventory system, it is important to physically count the inventory to ensure that the recorded amounts in the system are accurate. This serves as a check on the recorded inventory amounts and helps to identify any discrepancies or errors in the system.

A Physical Count of Inventory Is Required Even Though the Company