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Unformatted text preview: p! Recognize loss in period the loss occurs, not when the items
Internal Controls over Inventory:
Next to cash, most vulnerable asset to loss or theft.
• Company needs to be able to track inventory to help prevent stock-outs, backorders, etc.
• Separation of duties for accounting of inventory and handling inventory (recording and
• Adequate controls over inventory storage to help prevent loss or theft
• Limit access to inventory to only authorized employees
• Maintain perpetual inventory records
• Compare inventory records to physical counts of inventory 44 The following inventory information was available for Hallmark Company on 3/31/09.
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- Spring '08
- Financial Accounting