Which of the following most likely would be an internal control procedure designed to detect errors and fraud concerning the custody of inventory?
A)Periodic reconciliation of work in process with job cost sheets.
B)Segregation of functions between general accounting and cost accounting.
C)Independent comparisons of finished goods records with counts of goods on hand.
D)Approval of inventory journal entries by the storekeeper.

Question

Quizplus · Accepted Answer

Independent comparisons of finished goods records with counts of goods on hand would be an internal control procedure designed to detect errors and fraud concerning the custody of inventory as it ensures that the recorded inventory matches the actual physical inventory. A periodic reconciliation of work in process with job cost sheets would help detect errors in the production process but does not specifically address custody of inventory. Segregation of functions between general accounting and cost accounting and approval of inventory journal entries by the storekeeper would help prevent errors and fraud but do not specifically address custody of inventory.

Which of the Following Most Likely Would Be an Internal