Chapter 12, Problem 29GOQ

Instead of taking a physical inventory count on the balance-sheet date, the client may take physical counts prior to the year-end if internal control is adequate and:

1. (1) Well-kept records of perpetual inventory are maintained.
2. (2) Inventory is slow-moving.
3. (3) Computer error reports are generated for missing prenumbered inventory tickets.
4. (4) Obsolete inventory items are segregated and excluded.