Rather Than Counting the Entire Inventory at Year-End, a Company

Multiple Choice

Rather than counting the entire inventory at year-end, a company may make periodic, or cycle counts, of selected inventory items at various times during the year. Which of the following is necessary if the auditor plans to observe inventories at interim dates?

A) Complete recounts by independent teams are performed.
B) Perpetual inventory records are maintained.
C) Unit cost records are integrated with production accounting records.
D) Inventory balances are rarely at low levels.