expand icon
book Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac cover

Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Edition 26ISBN: 978-1337498159
book Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac cover

Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac

Edition 26ISBN: 978-1337498159
Exercise 55
Control of inventories
Hardcase Luggage Shop is a small retail establishment located in a large shopping mall. This shop has implemented the following procedures regarding inventory items:
a. Because the shop carries mostly high-quality, designer luggage, all inventory items are tagged with a control device that activates an alarm if a tagged item is removed from the store.
b. Because the display area of the store is limited, only a sample of each piece of luggage is kept on the selling floor. Whenever a customer selects a piece of luggage, the salesclerk gets the appropriate piece from the store's stockroom. Because all salesclerks need access to the stockroom, it is not locked. The stockroom is adjacent to the break room used by all mall employees.
c. Whenever Hardcase Luggage Shop receives a shipment of new inventory, the items are taken directly to the stockroom. Hardcase's accountant uses the vendor's invoice to record the amount of inventory received. State whether each of these procedures is appropriate or inappropriate. If it is inappropriate, explain why.
Explanation
Verified
like image
like image

The Procedure followed by Lincon Luggage...

close menu
Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac
cross icon