Asked by Michael Ariestan on Jul 20, 2024
Verified
List the internal control objectives illustrated by the following:
(a)keeping the inventory storeroom locked
(b)counting the inventory at the end of the accounting period and comparing it with the inventory ledger clerk's records
(c)using subsidiary ledgers and a perpetual inventory system
Internal Control Objectives
The goals or purposes of systems and processes designed to safeguard assets, ensure accurate financial reporting, and promote operational efficiency.
Inventory Storeroom
A designated area where materials or goods are stored until they are needed for production or sales.
Subsidiary Ledgers
Detailed ledgers that contain information supporting accounts listed in the general ledger, such as customer and vendor details.
- Analyze the effect of internal control measures on inventory management and reporting.
Verified Answer
(b)safeguarding the inventory from damage or theft and reporting inventory in the financial statements
(c)keeping inventory at proper levels and reporting inventory in the financial statements
Learning Objectives
- Analyze the effect of internal control measures on inventory management and reporting.
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