Rather Than Counting the Entire Inventory at Year-End, a Company

question 39

Multiple Choice

Rather than counting the entire inventory at year-end, a company may make periodic, or cycle counts, of selected inventory items at various times during the year. Which of the following is necessary if the auditor plans to observe inventories at interim dates?

• A) Complete recounts by independent teams are performed.
• B) Perpetual inventory records are maintained.
• C) Unit cost records are integrated with production accounting records.
• D) Inventory balances are rarely at low levels.

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Definitions:

Cystitis

Inflammation of the bladder, typically caused by a urinary tract infection (UTI).

Urethritis

Inflammation of the urethra, often resulting in pain during urination and an increased urge to urinate.

Causative Organism

A pathogen or microorganism that causes disease or illness in its host.

Hypertension

High blood pressure, usually a chronic condition; often identified by a systolic blood pressure above 140 mm/Hg and/or a diastolic blood pressure above 90 mm/Hg.