Question 4 Quantities on hand at the end of one month may not be sufficient to l

Question

Question 4

Quantities on hand at the end of one month may not be sufficient to last until the next month's count. If the company has taken this into account in establishing reorder levels, then it is carrying too large an investment in inventory.

True

False

Question 5

Requests for purchases of raw materials should come from the production department management and be based on production schedules and quantities on hand per perpetual records.

True

False

Question 6

The accounts payable clerk handles both the purchasing function and payment of invoices. This is an intrenal weakness at Ashland because:

The accounts payable clerk is already too busy.

This is not a satisfactory separation of duties.

The purchasing clerk is already too busy.

No one is checking the purchase order against the invoice.

The accounts payable clerk is already too busy.

This is not a satisfactory separation of duties.

The purchasing clerk is already too busy.

No one is checking the purchase order against the invoice.

Explanation / Answer

Q4. False. Carrying enough inventory to last until the next month's inventory level reaches the optimum level is not a large investment. It is a prudent decision to avoid stock out risk.

Q5. True. Request for stock should come from the production department.

Q6. This is not a satisfactory separation of duties

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.