INVENTORY CYCLE

Question 1

FUNCTIONS IN THE INVENTORY CYCLE

Question 2

(2) PRODUCTION PLANNING

Answer 2

Plan the process, production and factory manager

Question 2

(1)STORAGE OF RAW MATERIALS

Answer 2

Safeguarding them from theft, warehouse clerk.

Question 3

(3) TRANSFER OF MATERIALS OF PRODUCTION

Answer 3

To control the raw materials issued to the factory, Inventory clerk, factory and accounting personnel

Question 4

(4) PRODUCTION

Answer 4

To control the production process, factory personnel.

Question 5

(5)TRANSFER OF FINISHED GOODS TO FG WAREHOUSE

Answer 5

To control the goods transferred to the warehouse.

Question 6

(6) STORAGE OF FINISHED GOODS

Answer 6

Safeguard from theft and damages

Question 7

(7) COST ALLOCATION AND UPDATING OF INVENTORY RCORDS

Answer 7

To update costing for the manufactured inventory on the inventory records

Question 8

(8) MAINTENANCE OF INVENTORY RECORDS

Answer 8

To keep the inventory records up to date, accounting personnel

Question 9

BUSINESS RISK

Answer 9

encompasses anything that might push the business away from profitability or cause failure. These risks stem from internal and external factors such as operational issues, financial challenges, market competition, technological changes, or regulatory compliance.

Question 10

AUDIT RISK

Answer 10

is the risk that an auditor will issue an inappropriate audit opinion on financial statements that are materially misstated. It is auditor’s risk of failing to detect material errors or fraud during the audit process. Itis a concern primarily for the auditor rather than the business itself

Question 11

CONTROL ACTIVITIES

Answer 11

Proper physical controls - solid building structures, environmental conditions, access controls, perform regular independent cycle counts and reconcile physical inventory to inventory recorded.
Production plan drawn out to manufacture inventory that meets demand. Sales forecasts and budgets.