Asked by Barbara silva on Jun 14, 2024
Verified
Safeguarding inventory and proper reporting of the inventory in the financial statements are the reasons for controlling the inventory.
Safeguarding Inventory
Measures and controls put in place to protect a company's inventory from loss, theft, or damage.
Financial Statements
Financial statements are records that outline the financial activities and condition of a business, including the balance sheet, income statement, and cash flow statement.
- Recognize the importance of precise inventory accounting in financial disclosures.
- Understand the significance of inventory control measures and their start point.
Verified Answer
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Final Answer :
True
Explanation :
Safeguarding inventory ensures that it is not stolen, damaged or misused, while proper reporting of the inventory in the financial statements ensures that the company's financial position is accurately reflected. Control over inventory helps achieve both these objectives.
Learning Objectives
- Recognize the importance of precise inventory accounting in financial disclosures.
- Understand the significance of inventory control measures and their start point.
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