Identify internal control procedures that would be used to maintain accurate inventory records.

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Chapter 21, Problem 13.3MCQ

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Identify internal control procedures that would be used to maintain accurate inventory records.

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The tests of controls for inventory records would include the following procedures.A. Existence.B. Rights.C. Completeness.D. Valuation.E. Presentation and disclosure.For each of the procedures, choose the letter of the correct PCAOB assertion(s). Only one letter per procedure should be used._______ 1. Trace a sample of sales invoices to perpetual inventory record entry of issue._______ 2. Select a sample of inventory item from perpetual records and vouch additions to receiving reports._______ 3. Select a sample of shipping documents and review the accounting summary of the quantities and prices._______ 4. Trace posting of sample of sales invoices to amounts in general ledger._______ 5. Review the appropriateness of standard costs to price inventory issues and cost of goods sold

For each statement below, identify whether the statement applies to the periodic inventory system, the perpetual inventory system, or both. Periodic inventory system, Perpetual inventory system, or Both? a. Normally used for relatively inexpensive goods. b. Keeps a running computerized record of merchandise inventory. c. Achieves better control over merchandise inventory. d. Requires a physical count of inventory to determine the quantities on hand. e. Uses bar codes to keep up-to-the-minute records of inventory.

What is the main distinction between perpetual and periodic inventory systems? Which type of system providesbetter internal control over inventory? Explain why.