ICAEW ARF · Chapter 6 · Question 5 of 11
During a year-end inventory count, count sheets are sequentially numbered, issued to count teams and accounted for at the end of the count. What is the purpose of this control?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) To ensure that all count sheets are returned, so that no counted inventory is omitted
Explanation
Accounting for the sequence of count sheets ensures that none are lost or that extra ones are added, so the final inventory listing includes everything counted. Valuation, damaged items and ownership are addressed by other procedures, such as reviewing costs, recording condition during the count and segregating goods held for third parties.
More Controls over payroll, inventory and cash MCQs
- Q7Which of the following controls mainly addresses the valuation of inventory, rather than its existence or completeness?
- Q8What is the main purpose of a company preparing a monthly bank reconciliation that is reviewed by someone independent of the cash book?
- Q9Which control over cash received in the post is most effective?
- Q10Which of the following describes an imprest system for petty cash?
- Q11Which of the following controls is most likely to detect 'teeming and lading' by a receivables clerk?