Warehouse Inventory Controls and Off-Site Storage Quiz

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?

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

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

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

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

Forecasting future demand for products (D) Signup and view all the answers

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

In-transit inventory (C) Signup and view all the answers

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

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

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

Intercompany inventory transfers (C) Signup and view all the answers

What should an inventory control system ensure regarding inventory costs?

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

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

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

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

Billing initiation (D) Signup and view all the answers

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

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

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

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

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

Avoid manual entry of transactions (B) Signup and view all the answers

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

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

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

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

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

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

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

Optimizing storage space utilization in the warehouse (A) Signup and view all the answers

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

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