Multiple Choice
In the context of inventory accounting, completed units that have not yet been sold are classified as which of the following?
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5. Inventory
Inventory Errors
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Among the advantages of cycle counting is that it:
A
allows inventory errors to be discovered and corrected without shutting down operations
B
guarantees that inventory records will always be 100% accurate
C
eliminates the need for any physical inventory counts
D
requires all inventory items to be counted on the same day
Verified step by step guidance1
Understand the concept of cycle counting: Cycle counting is a method of inventory management where a subset of inventory is counted on a regular basis rather than counting the entire inventory at once.
Analyze the advantages of cycle counting: It allows for continuous monitoring of inventory accuracy and helps identify and correct errors without disrupting operations.
Evaluate the incorrect options: Cycle counting does not guarantee 100% accuracy of inventory records, nor does it eliminate the need for physical inventory counts entirely. Additionally, it does not require all inventory items to be counted on the same day.
Focus on the correct advantage: Cycle counting enables inventory errors to be discovered and corrected without shutting down operations, which is a key benefit of this method.
Conclude the reasoning: Based on the analysis, the correct answer aligns with the advantage of cycle counting that emphasizes operational continuity and error correction.
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