Multiple Choice
Which of the following is NOT a function of inventory in a merchandising or manufacturing business?
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4. Merchandising Operations
Cost of Goods Sold - Perpetual Inventory vs. Periodic Inventory
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In relation to inventory, what are the two primary functions that management must be concerned with?
A
Control and accounting
B
Purchasing and selling
C
Ordering and shipping
D
Financing and investing
Verified step by step guidance1
Understand the context of inventory management in Financial Accounting. Inventory refers to goods available for sale or raw materials used in production, and management must ensure proper handling and tracking.
Identify the two primary functions related to inventory management. These functions typically involve ensuring accurate records (accounting) and maintaining oversight to prevent loss or inefficiency (control).
Evaluate the options provided in the problem: 'Control and accounting,' 'Purchasing and selling,' 'Ordering and shipping,' and 'Financing and investing.' Consider which pair aligns most closely with the primary responsibilities of inventory management.
Recognize that 'Control and accounting' are essential for inventory management because control ensures proper handling and safeguarding of inventory, while accounting ensures accurate financial reporting and valuation.
Conclude that the other options, such as 'Purchasing and selling,' 'Ordering and shipping,' and 'Financing and investing,' are secondary or unrelated to the core functions of inventory management.
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