Question

Inventory records must be verified through a continuing audit. The method of doing this is known as

physical inventory.

inventory management.

inventory minimization.

cycle counting.

None of the above

Answer 1

Cycle count is an inventory auditing procedure, which falls under inventory management, where a small subset of inventory, in a specific location, is counted on a specified day. Cycle counting is a popular inventory counting solution that allows businesses to count a number of items in a number of areas within the warehouse without having to count the entire inventory. This is a sampling technique where count of a certain number of items infers the count for the whole warehouse.

When a cycle count is performed, there are two inferences that are made. The primary inference is that the accuracy of the items in the cycle count can be used to determine the accuracy of the items in the warehouse as a whole. The other inference is that if an error is found in the cycle count then that error could be expected to occur for other items in the warehouse.

Therefore correct answer to the question is “ cycle counting “

The method of doing this is called CYCLE COUNTING