Question

Cycle counting A. involves shutting down production once per year to perform the annual inventory count. B. is a process by which inventory records are verified. C. increases annual inventory adjustments. D. cannot be performed in an independent demand situation.

Answer 1

Answer:

Correct option is (B)

Explanation:

Cycle counting is the process by which a part of whole inventory, can be called sample, is verified to estimate the entire inventory. Whole inventory is not verified in cycle counting. It is believed that an error observed in the sample would be present in the whole inventory.

So cycle counting helps in verifying inventory records to check its accuracy.