What is your opinion on this statement in terms of the objectives of a good equipment...

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Accounting

What is your opinion on this statement in terms of theobjectives of a good equipment inventory control system?
Our textbook states that inventory controls should ensure thatquantities received are accurately recorded, accounted for untilused, stored in an accessible manner, and kept safe from loss dueto theft, damage and deterioration. Effective inventory controlrequires cost-effective receiving, storing, and accounting systems.It also requires periodic physical counts of inventories,comparison of the physical counts with perpetual inventory recordsand tracking down the causes of disparities between the two.(Government Performance Audit in Action 2014, 4th edition, Ives,Hancox)

Objectives of a Good Equipment Inventory ControlSystem
My first job out of college was as a cost accountant for aCaterpillar dealership, so I will consider the above related toequipment for that entity. Specifically, the equipment such anentity sales or rents to customers.
The first objective of a good system would be for the entity toknow the equipment that it has on-hand for each category, sale andrent. Records would need to provide the value and location, so thatstaff could provide accurate information to customers and keepstaff from renting equipment that is meant for sale or vice versato ensure the entity has equipment on hand to meet customer'sneeds. Without the proper equipment on hand, the company could loseincome.
The heavy equipment isn't easily subject to deterioration.However, it costs thousands or even hundreds of thousands, so it isimportant that the system accurately accounts for the equipment.Specifically, the correct value and installed equipment which couldbe valuable must be input upon receipt, there needs to be a way totrack the equipment in case of theft, and there should be controlsover who can remove equipment from inventory.
Another objective would be for the system to divide theequipment between the different locations. Past rental and salesdemand should be used to make this determination. Some locationscould have a higher rental business than sales, so the dealershipwould want to have more of that type equipment at thatlocation.
Another objective would be for the system to help managementkeep track of inventory turnover by item and location, so that thesystem or staff can determine when equipment should be purchased ormoved between locations. With the large equipment such as this, anannual inventory would be sufficient unless problems are foundduring the year.

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Introduction Whether the objective of a Good Equipment Inventory Control System is satisfies the objectives of inventory control as specified in text book like inventory control is ensure that quantities received are accurately recorded accounted for until used stored in an accessible manner and kept safe from loss due to theft damage and deterioration Effective inventory control requires costeffective receiving storing and accounting systems It also requires periodic physical counts of inventories comparison of the See Answer

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What is your opinion on this statement in terms of theobjectives of a good equipment inventory control system?Our textbook states that inventory controls should ensure thatquantities received are accurately recorded, accounted for untilused, stored in an accessible manner, and kept safe from loss dueto theft, damage and deterioration. Effective inventory controlrequires cost-effective receiving, storing, and accounting systems.It also requires periodic physical counts of inventories,comparison of the physical counts with perpetual inventory recordsand tracking down the causes of disparities between the two.(Government Performance Audit in Action 2014, 4th edition, Ives,Hancox)Objectives of a Good Equipment Inventory ControlSystemMy first job out of college was as a cost accountant for aCaterpillar dealership, so I will consider the above related toequipment for that entity. Specifically, the equipment such anentity sales or rents to customers.The first objective of a good system would be for the entity toknow the equipment that it has on-hand for each category, sale andrent. Records would need to provide the value and location, so thatstaff could provide accurate information to customers and keepstaff from renting equipment that is meant for sale or vice versato ensure the entity has equipment on hand to meet customer'sneeds. Without the proper equipment on hand, the company could loseincome.The heavy equipment isn't easily subject to deterioration.However, it costs thousands or even hundreds of thousands, so it isimportant that the system accurately accounts for the equipment.Specifically, the correct value and installed equipment which couldbe valuable must be input upon receipt, there needs to be a way totrack the equipment in case of theft, and there should be controlsover who can remove equipment from inventory.Another objective would be for the system to divide theequipment between the different locations. Past rental and salesdemand should be used to make this determination. Some locationscould have a higher rental business than sales, so the dealershipwould want to have more of that type equipment at thatlocation.Another objective would be for the system to help managementkeep track of inventory turnover by item and location, so that thesystem or staff can determine when equipment should be purchased ormoved between locations. With the large equipment such as this, anannual inventory would be sufficient unless problems are foundduring the year.