Perpetual inventory master files maintained by persons who do not have custody of or access to assets are a useful cost accounting control, because:
A) they are a record that can be used to pinpoint responsibility for custody when there are differences between physical counts and amounts shown on records.
B) they provide a record of items on hand, which is used to initiate production or acquisition of additional materials or goods.
C) they provide a record of the use of raw materials and sale of finished goods, which can be reviewed for obsolete or slow-moving items.
D) all of the above

Question

Quizplus · Accepted Answer

Perpetual inventory master files serve multiple purposes as a cost accounting control. They help in pinpointing responsibility for discrepancies between physical counts and recorded amounts (A), initiating production or acquisition by providing a record of items on hand (B), and reviewing the use of raw materials and sales of finished goods to identify obsolete or slow-moving items (C). Therefore, all the given options are correct.

Perpetual Inventory Master Files Maintained by Persons Who Do Not