As Part of the Audit,the Auditor May Examine Authorization Procedures

question 60

Multiple Choice

As part of the audit,the auditor may examine authorization procedures with respect to the repurchase or redemption of capital stock.In particular,for a public company the auditor would verify that which of the following details have been authorized?

• A)general ledger accounts affected,dividends included,amount to be paid
• B)type of stock,timing,amount to be paid
• C)individuals from whom repurchase will be permitted,maximum amount
• D)type of stock,amount to be paid,effect upon bond sinking funds

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Definitions:

Ending Inventory

The value of goods available for sale at the end of an accounting period, determined by physical counts or accounting methods.

LIFO

Stands for Last In, First Out, an inventory valuation method where the most recently produced or purchased items are recorded as sold first.

Periodic Inventory System

An inventory accounting system where inventory counts are performed and updated at specific intervals to determine cost of goods sold and ending inventory levels.

Ending Inventory

The value of goods available for sale at the end of an accounting period. It is the beginning inventory plus purchases minus the cost of goods sold.