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Questions and Answers
What is a key purpose of establishing a system of budgets for inventories?
What is a key purpose of establishing a system of budgets for inventories?
- To discourage unnecessary investment in inventories (correct)
- To have a detailed record of historical inventory data
- To reduce the need for production schedules
- To increase the complexity of inventory management
In the context of inventory management, what is a primary advantage of perpetual inventory records?
In the context of inventory management, what is a primary advantage of perpetual inventory records?
- Encouraging unnecessary investment in inventories
- Eliminating the need for production schedules
- Providing historical financial data only
- Facilitating continuous stock verification (correct)
What does the 'Two Bin System' mentioned in the text primarily aim to achieve?
What does the 'Two Bin System' mentioned in the text primarily aim to achieve?
- Eliminate the use of material bins in the storage process
- Reduce the need for continuous stock verification
- Efficiently manage inventory levels by using two distinct bins (correct)
- Encourage overstocking to minimize order frequency
Why is it important to establish a system of budgets for inventories?
Why is it important to establish a system of budgets for inventories?
What is the main purpose of the 'Bin Cards' in the perpetual inventory system?
What is the main purpose of the 'Bin Cards' in the perpetual inventory system?
How does the establishment of budgets for inventories help in inventory management?
How does the establishment of budgets for inventories help in inventory management?
What is a crucial step for the success of perpetual inventory?
What is a crucial step for the success of perpetual inventory?
What is the main advantage of perpetual inventory according to the text?
What is the main advantage of perpetual inventory according to the text?
Which activity is NOT part of maintaining successful perpetual inventory according to the text?
Which activity is NOT part of maintaining successful perpetual inventory according to the text?
Why is reconciling physical and book balances important in perpetual inventory?
Why is reconciling physical and book balances important in perpetual inventory?
What differentiates perpetual inventory from periodic inventory according to the text?
What differentiates perpetual inventory from periodic inventory according to the text?
