Warehouse Inventory Controls and Off-Site Storage Quiz
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Questions and Answers

Which of the following is NOT a control measure for off-site inventory storage?

  • Restricting warehouse access to designated personnel (correct)
  • Including off-site storage locations in the inventory database
  • Conducting regular physical inventory counts at off-site locations
  • Implementing access control measures
  • What is the primary concern associated with obsolete inventory?

  • The risk of inventory shrinkage due to obsolete items
  • The cost of storing obsolete inventory
  • The difficulty in accurately tracking obsolete inventory
  • The potential loss of value for obsolete inventory over time (correct)
  • Which of the following is NOT a control measure for scrap inventory mentioned in the text?

  • Conducting periodic physical inventory counts for scrap inventory (correct)
  • Utilizing computer tracking for items with a short shelf life
  • Requiring transaction forms for scrap and rework transactions
  • Implementing a quality control process for suppliers
  • What is the purpose of requiring check payments by scrap haulers, as mentioned in the text?

    <p>To prevent unauthorized removal of scrap inventory (B)</p> Signup and view all the answers

    Which of the following is a control measure for inventory stocking?

    <p>Picking from stock based on bills of material (A)</p> Signup and view all the answers

    Which of the following is NOT a primary concern when dealing with inventory?

    <p>Forecasting future demand for products (D)</p> Signup and view all the answers

    Which of the following areas is often overlooked when designing inventory control systems?

    <p>In-transit inventory (C)</p> Signup and view all the answers

    What should an inventory control system aim to minimize the risk of?

    <p>Inventory being lost through various means such as pilferage or natural disasters (C)</p> Signup and view all the answers

    Which of the following is NOT listed as an area of inventory controls in the text?

    <p>Intercompany inventory transfers (C)</p> Signup and view all the answers

    What should an inventory control system ensure regarding inventory costs?

    <p>Costs are fairly and consistently applied to inventories (C)</p> Signup and view all the answers

    What is the principal control system target related to inventory costing?

    <p>Ensuring a proper cost roll-up (A)</p> Signup and view all the answers

    What is the main concern from a billing system perspective when it comes to delivering goods to customers?

    <p>Billing initiation (D)</p> Signup and view all the answers

    What is the key control issue related to billing transactions under a drop shipping arrangement?

    <p>Automate third-party drop shipment notifications (B)</p> Signup and view all the answers

    What is the greatest challenge in maintaining record accuracy when dealing with a high volume of inventory transactions?

    <p>Data entry errors due to transaction volume (C)</p> Signup and view all the answers

    What is a central control measure to avoid errors in inventory transactions?

    <p>Avoid manual entry of transactions (B)</p> Signup and view all the answers

    Which of the following is NOT a key control issue regarding in-transit inventories?

    <p>Tracking the movement of in-transit inventory through the supply chain (C)</p> Signup and view all the answers

    Which of the following controls is NOT recommended to address issues with inventory in transit?

    <p>Maintain detailed shipping logs to track inventory movement (B)</p> Signup and view all the answers

    Which of the following inventory stocking controls is NOT recommended in the text?

    <p>Increase the number of product options to meet customer demand (D)</p> Signup and view all the answers

    Which of the following is NOT identified as a key control target for inventory storage?

    <p>Optimizing storage space utilization in the warehouse (A)</p> Signup and view all the answers

    Which of the following controls is recommended in the text to address issues with intercompany inventory transfers?

    <p>Audit both sides of all intercompany transfer transactions (C)</p> Signup and view all the answers

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