The primary objectives of control over inventory are _____.

The primary objectives of control over inventory are _____.

(a) safeguarding the inventory from damage and maintaining constant observation of the inventory

(b) reporting inventory in the financial statements

(c) maintaining constant observation of the inventory and reporting inventory in the financial statements

(d) safeguarding inventory from damage and reporting inventory in the financial statements.

Answer: (d) safeguarding inventory from damage and reporting inventory in the financial statements.

The primary objectives of control over inventory are twofold: protecting the inventory from any forms of destruction in order to realize accurate representation in the financial statements. Protecting stock entails the right storage, protection, and proper stock management practices which ensure that there is minimal physical injury or loss to the stored items. Furthermore, timely and accurate reports on inventory are important for the balance sheet and income statement because they show the actual value and quantity of inventory it possesses. This calls for appropriate records to be kept, random stock counting, and attempts to explain variations observed in actual stock from recorded stock. In this way, a company meets its stated aims as follows, and can control stocks, reduce losses and give a truthful account of stocks in its balance sheet.