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Risk and Procedures for Control

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Management can best strengthen internal control over the custody of inventory stored in an off-site warehouse by implementing

Reconciliations of transfer slips to/from the warehouse with inventory records. Increases in insurance coverage. Regular reconciliation of physical inventories to accounting records.Regular confirmation of the amount on hand with the custodian of the warehouse.

Correct - Your answer is correct.

Wrong - Your answer is wrong.

Detailed Answer

Answer (C) is correct. The most effective control over off-site inventory is the periodic comparison of the recorded accountability with the actual physical inventory.

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