Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

5. Inventory

Inventory Errors

Financial Accounting

5. Inventory

Inventory Errors

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Multiple Choice

If you are managing inventory of work in process, which source of control should you use?

Receiving reports and purchase invoices

Sales invoices and shipping documents

Production orders and job cost sheets

Bank statements and cash receipts

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Verified step by step guidance

Understand the context: Work in process inventory refers to goods that are partially completed in the production process. Managing this inventory requires tracking the costs and progress associated with production activities.

Identify the purpose of control: The goal is to ensure accurate tracking of costs and production progress. This involves monitoring materials, labor, and overhead applied to the work in process inventory.

Evaluate the options: Receiving reports and purchase invoices are used for raw materials inventory control. Sales invoices and shipping documents are relevant for finished goods inventory. Bank statements and cash receipts are used for cash management, not inventory control.

Focus on the correct source: Production orders and job cost sheets are specifically designed to track the costs and progress of work in process inventory. Production orders outline the tasks and materials required, while job cost sheets record the costs incurred for each job or batch.

Apply the concept: Use production orders to monitor the flow of materials and labor into the production process, and job cost sheets to track the accumulation of costs for each job or batch. This ensures accurate control and reporting of work in process inventory.