Taking a physical count of inventory
A) is not necessary when a periodic inventory system is used
B) should be dine near year-end
C) has no internal control relevance
D) is not necessary when a perpetual inventory system is used

Question

Quizplus · Accepted Answer

Taking a physical count of inventory should be done near year-end to ensure accurate financial reporting and to make any necessary adjustments. A periodic inventory system requires a physical count to determine ending inventory and cost of goods sold. A perpetual inventory system may not require a physical count as it continuously tracks inventory levels, but periodic counts are still recommended for verification purposes. Physical counts also have internal control relevance as they can help prevent or detect inventory theft or mismanagement.

Taking a Physical Count of Inventory