Question 1

Storeroom security is a vital concern. Stolen goods can be an enormous source of loss for your company if security is not maintained. Take the following measures to minimize the risks of loss from theft:

Accepted Answer

All of the measures listed are important for storeroom security and should be implemented to minimize the risks of loss from theft. Using adequate locks and regularly changing the locks or combinations helps to prevent unauthorized access. Issuing keys to as few individuals as possible, and making sure they are used strictly, helps to control access and prevent theft. Signing keys out daily ensures accountability for who has access to the storeroom.

Question 2

Valuable inventory needs to be protected from theft, spoilage, and waste. The inventory system usually used is called:

Accepted Answer

Perpetual inventory is a system that constantly tracks inventory levels in real time to prevent theft or loss. It also helps with identifying spoilage or waste and allows for prompt corrective action. Expensive or high-valued inventory are not specific inventory systems or methods.

Question 3

Which description is not true?

Accepted Answer

All the statements A, B, and C describe true and appropriate measures for maintaining storeroom security and sanitation, which are important aspects of storeroom management.

Question 4

At times a delivery will arrive without an invoice. What document should be prepared by the storeroom clerk?

Accepted Answer

A memo invoice should be prepared by the storeroom clerk when a delivery arrives without an invoice. This serves as a temporary record of the received goods until the actual invoice is received.

Question 5

FIFO means that you will use the oldest products first. This is advantageous for storeroom purposes and for avoiding spoilage. However, in times of rapid inflation, a FIFO system causes an overvaluation of your inventory.

Accepted Answer

In times of rapid inflation, the cost of purchasing new inventory may be higher than the cost of the oldest inventory on hand, causing an overvaluation of the inventory when using a FIFO system.

Question 6

The storeroom must be organized logically and in a manner that preserves flavors and shelf lives. Which of the following statements is not true?

Accepted Answer

Storing heavy items like flour and sugar farthest from the storeroom door is not practical as it makes them harder to access and transport, which is inefficient for bulk items.

Question 7

In general, a credit memo is used to record a credit due from a purchaser when the merchandise received does not conform to what was ordered.

Accepted Answer

The answer of In general, a credit memo is used...

Question 8

A credit memo is simply a list of all items received. This documentation is critical for accrual and end-of-month cut-off totaling to ensure accuracy of the accrual.

Accepted Answer

A credit memo is not simply a list of all items received. It is a document issued by a seller to a buyer that indicates a reduction in the amount due or a refund of an overpayment made by the buyer.

Question 9

The clerk should verify the supplier, quality, quantity, and price of products delivered before signing any receipt.

Accepted Answer

The clerk should verify the supplier, quality, quantity, and price of products delivered before signing any receipt to ensure that they have received what was requested and agreed upon, and to avoid any potential disputes or issues later on.

Question 10

Who is responsible for auditing receiving procedures?

Accepted Answer

The purchaser is responsible for auditing receiving procedures to ensure that products received match the products ordered, are in good condition, and are properly documented. The vendor and truck driver may have some responsibility in following proper procedures but ultimately it is the purchaser's responsibility to ensure proper receiving procedures are in place.

Question 11

The credit memo form is used to record a credit due from a supplier. The receiving clerk completes this form when the merchandise received does not conform to what was ordered in terms of quality, quantity, specification, or price.

Accepted Answer

The statement describes the accurate use of a credit memo form.

Question 12

The term direct issue means that a purchase is charged directly to a receiving outlet, such as the kitchen.

Accepted Answer

Direct issue means that a purchase is charged directly to a receiving outlet, such as the kitchen.

Question 13

What needs to be prepared and signed when requesting food items from the storeroom?

Accepted Answer

Storeroom requisition form needs to be prepared and signed in order to request food items from the storeroom.

Question 14

When a vendor consistently delivers products early or late, the clerk should not be too concerned as long as the products are received.

Accepted Answer

The clerk should be concerned about a vendor consistently delivering products early or late as it can disrupt the store's operations and affect customer satisfaction. It is important for vendors to deliver products on time as agreed upon in their contract with the store.

Question 15

In deflationary times, you may wish to use a LIFO system to value your ending inventory. In a LIFO storeroom, the most recently purchased products are used and charged, thus reducing current taxes by eliminating inventory profits.

Accepted Answer

In deflationary times, using a LIFO (Last In, First Out) system could actually increase your tax liability because the most recently purchased (and in a deflationary environment, cheaper) items are sold first, leaving older, more expensive items in inventory. This could result in higher reported profits and thus higher taxes, contrary to the goal of reducing current taxes.

Question 16

When meats are stored centrally and are not issued directly to outlets, storeroom personnel will need to establish what system to identify and price all meat issued?

Accepted Answer

A meat tag system can help storeroom personnel easily identify and price all meat issued from central storage. This ensures accurate inventory management and cost control. A price tag is not specific to meat and may not contain all the necessary information, while a supplier tag only identifies the source of the meat and not its price.

Question 17

The storeroom clerk should practice:

Accepted Answer

The choice between FIFO (First In, First Out) and LIFO (Last In, First Out) depends on the specific needs and strategies of the inventory management system. Both methods are widely used in different contexts.

Question 18

The receiving department should keep a record of the weight of various empty containers in order to determine the net weight of perishables in these containers. This is called:

Accepted Answer

Tare weight refers to the weight of an empty container or vehicle that is deducted from the gross weight of goods to determine the net weight. This is important in the food industry where the weight of the packaging can significantly impact the pricing and selling of perishables.

Question 19

Storeroom personnel are responsible for inspecting sanitation in all storage areas and bringing deficiencies to the attention of the purchasing manager.

Accepted Answer

Storeroom personnel are responsible for inspecting sanitation in all storage areas and bringing deficiencies to the attention of the purchasing manager.

Question 20

The vendors are responsible for proper receiving procedures, and the purchasers are responsible for proper purchasing procedures.

Accepted Answer

The answer of The vendors are responsible for proper receiving...

Quiz 6: Purchasing Controls

Storeroom security is a vital concern. Stolen goods can be an enormous source of loss for your company if security is not maintained. Take the following measures to minimize the risks of loss from theft:

Valuable inventory needs to be protected from theft, spoilage, and waste. The inventory system usually used is called:

Which description is not true?

At times a delivery will arrive without an invoice. What document should be prepared by the storeroom clerk?

FIFO means that you will use the oldest products first. This is advantageous for storeroom purposes and for avoiding spoilage. However, in times of rapid inflation, a FIFO system causes an overvaluation of your inventory.

The storeroom must be organized logically and in a manner that preserves flavors and shelf lives. Which of the following statements is not true?

In general, a credit memo is used to record a credit due from a purchaser when the merchandise received does not conform to what was ordered.

A credit memo is simply a list of all items received. This documentation is critical for accrual and end-of-month cut-off totaling to ensure accuracy of the accrual.

The clerk should verify the supplier, quality, quantity, and price of products delivered before signing any receipt.

Who is responsible for auditing receiving procedures?

The credit memo form is used to record a credit due from a supplier. The receiving clerk completes this form when the merchandise received does not conform to what was ordered in terms of quality, quantity, specification, or price.

The term direct issue means that a purchase is charged directly to a receiving outlet, such as the kitchen.

What needs to be prepared and signed when requesting food items from the storeroom?

When a vendor consistently delivers products early or late, the clerk should not be too concerned as long as the products are received.

In deflationary times, you may wish to use a LIFO system to value your ending inventory. In a LIFO storeroom, the most recently purchased products are used and charged, thus reducing current taxes by eliminating inventory profits.

When meats are stored centrally and are not issued directly to outlets, storeroom personnel will need to establish what system to identify and price all meat issued?

The storeroom clerk should practice:

The receiving department should keep a record of the weight of various empty containers in order to determine the net weight of perishables in these containers. This is called:

Storeroom personnel are responsible for inspecting sanitation in all storage areas and bringing deficiencies to the attention of the purchasing manager.

The vendors are responsible for proper receiving procedures, and the purchasers are responsible for proper purchasing procedures.