If a Manufacturing Company's Inventory of Supplies Consists of a Large

Multiple Choice

If a manufacturing company's inventory of supplies consists of a large number of small items, which of the following would be considered a weakness in internal controls?

A) Supplies of relatively low value are expensed when acquired.
B) Supplies are physically counted on a cycle basis, whereby limited counts occur quarterly and each item is counted at least once annually.
C) The stores function is responsible for updating perpetual records whenever inventory items are moved.
D) Perpetual records are maintained for inventory items only if they are significant in value.