An Auditor Selected a Product Recorded in the Finished Goods

question 45

Multiple Choice

An auditor selected a product recorded in the finished goods perpetual inventory subsidiary account. The auditor went to the warehouse and counted the product and compared this amount with the amount in the finished goods perpetual inventory subsidiary account. Which ASB balance assertion is the auditor most likely testing?

• A)Existence
• B)Completeness
• C)Rights and obligations
• D)Valuation

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Definitions:

Fiscal Policy

Governmental adjustments of its spending levels and tax rates to influence a nation's economy.

Financial Market

The marketplace where buyers and sellers interact to trade financial instruments, such as stocks, bonds, currencies, and derivatives, often within an institutional framework.

Crowding-Out

A situation where increased government spending leads to a reduction in private sector spending.

Government Purchases

Expenditures made by the government for goods and services that are necessary for the public sector and to support economic activity.