The Client Has a Perpetual Inventory System,and Takes an Inventory

question 10

Multiple Choice

The client has a perpetual inventory system,and takes an inventory count of 100 items every two weeks for comparison to the perpetual records.There are no plans to have a complete year-end physical count of inventory.How will the auditor conduct the audit of physical inventory?

• A)Select an attribute sample of items to count at the year end for comparison to the perpetual records.
• B)Select a dollar unit sample of items to count at the year end for comparison to the perpetual records.
• C)Use roll-forwards to carry forward the inventory records from the cyclical counts for an attribute sample of inventory items.
• D)Conduct test counts and compare the perpetual records with a cyclical count during the interim audit.

---

Definitions:

REM

Rapid Eye Movement, a phase of sleep characterized by fast and random movement of the eyes, associated with dreaming.

NREM

Non-Rapid Eye Movement sleep, which is characterized by slower brain waves and serves as a period of rest and recovery for the body.

REM Sleep

A phase of sleep characterized by rapid eye movement, during which dreaming frequently occurs and the body undergoes increased brain activity.

Dreams

A series of thoughts, images, and sensations occurring in a person's mind during sleep, often reflecting unconscious desires or concerns.