While Observing a Client's Annual Physical Inventory, an Auditor Recorded

question 25

Multiple Choice

While observing a client's annual physical inventory, an auditor recorded test counts for several items and noticed that certain test counts were higher than the recorded quantities in the client's perpetual records. This situation could be the result of the client's failure to record

• A)purchase discounts.
• B)purchase returns.
• C)sales.
• D)sales returns.

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Definitions:

Outsourcing

Transferring a specialized task or job from one organization to a different organization, usually in another country, as a cost-saving device.

Global Stratification

The unequal distribution of resources, wealth, and power across countries and regions around the world, leading to a hierarchy of nations.

International Division

Refers to the segmentation of labor, production, and industries globally, often dictated by factors such as economic status, technological advancement, and resource distribution.

Labor

Human effort, either physical or mental, used in the production of goods and services.