The safeguarding of inventory most likely includes
A) comparison of the information contained on the purchase requisitions, purchase orders, receiving reports, and vendors' invoices.
B) periodic reconciliation of detailed inventory records with the actual inventory on hand by taking a physical count.
C) analytical procedures for raw materials, goods in process, and finished goods that identify unusual transactions, theft, and obsolescence.
D) application of established overhead rates on the basis of direct labor hours or direct labor costs.

Question

Quizplus · Accepted Answer

Periodic reconciliation of detailed inventory records with the actual inventory on hand by taking a physical count is the most important method for safeguarding inventory. This helps to identify any unauthorized usage or theft, as well as any discrepancies between the recorded inventory and the actual inventory on hand. While the other options listed may be part of overall inventory control procedures, they are not directly related to safeguarding inventory.

The Safeguarding of Inventory Most Likely Includes