Continuous Inventory Counting (2)

Question 1

Continuous inventory (Management)

Answer 1

Management has a programme of inventory counting throughout the year

Question 2

Continuous inventory (Modern computing power sales)

Answer 2

Continuous systems make use of modern computing power to link inventory records to information about sales and purchases

Question 3

Continuous inventory (Modern computing power location)

Answer 3

Management information such as an item’s location within the entity

Question 4

Continuous inventory (monitoring inventory levels)

Answer 4

Preferred method of monitoring inventory levels throughout the year

Question 5

Weakness of monitoring inventory levels?

Answer 5

Over time the actual inventory level will tend to diverge from what computer says it should be, as a result of unrecorded transactions

Question 6

What is a result of this divergence?

Answer 6

It will be necessary to perform physical inventory counts of selected inventory lines throughout the year

Question 7

What does selecting inventoru lines throughout the year determine?

Answer 7

The extent of system;s divergence from actual inventory levels

Question 8

What should happen with all inventory lines?

Answer 8

Subject to a physical count at least once a year