Question

Which of the following methods is commonly used to verify the ending balance in raw materials inventory?

A) Physical Inventory Count
B) Financial Statement Analysis
C) Ratio Analysis
D) Budgetary Control

Answer 1

To verify the ending balance in raw materials inventory, the commonly used method is a A)Physical Inventory Count, involving a manual count and comparison with inventory records.

Step-by-step explanation:

The method commonly used to verify the ending balance in raw materials inventory is a Physical Inventory Count. A physical inventory count involves manually counting all of the raw materials on hand at the end of a period. This real count is then compared to the inventory records to ensure accuracy.

Detect discrepancies, and update financial records accordingly. While financial statement analysis, ratio analysis, and budgetary control are useful for various aspects of inventory management and business assessment, they do not directly verify physical inventory quantities.