Final answer:
The goal of physical inventory reconciliation is to compare the physical count with the perpetual records to ensure accurate financial reporting and detect discrepancies, such as theft or record-keeping errors.
Step-by-step explanation:
The goal of physical inventory reconciliation is to compare the physical count with the perpetual records. This process involves counting the actual inventory in a business and then comparing these numbers to the inventory records in the company's accounting system. Firms typically do this at the end of an accounting period to ensure that the amount of inventory reported in the financial statements accurately reflects the physical inventory.
There are several reasons for discrepancies between the physical count and the accounting records, including theft, loss, damage, or errors in record-keeping. Conducting a physical inventory reconciliation helps businesses detect such problems. By identifying and correcting these discrepancies, a company can ensure more accurate financial reporting, which is crucial for making informed business decisions and maintaining the integrity of financial statements.
The options provided in the question highlight various aspects of inventory management. While option a, determining the quantity of inventory sold, is a result of sales and inventory consumption, it is not the direct goal of physical inventory reconciliation. Option b suggests comparing the physical count with the perpetual records, which is correct. Option c, comparing the physical count with the periodic records, is a related activity but not the primary goal of reconciliation when a perpetual inventory system is used. Lastly, option d, determining the quantity of inventory in process, may be part of a physical count in some types of businesses, particularly in manufacturing, but is not the overarching goal.