Which of the Following Would the Auditor Most Likely Do

question 32

Multiple Choice

Which of the following would the auditor most likely do when testing the valuation assertion for inventory?

• A)Confirm inventory on consignment.
• B)Examine receiving reports for inventory,tracing the recorded amounts.
• C)Observe the taking of physical inventory.
• D)Vouch inventory purchases to vendor invoices.

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Definitions:

Cost Of Production

The total expenditure incurred in manufacturing a product or providing a service, including materials, labor, and overhead costs.

Initial Contribution

The initial investment or capital put into a business venture or project by its founders or investors.

Equipment

Tangible assets used in the operation of a business, such as machinery, computers, and vehicles, which are used over a period of time and subject to depreciation.

Cash

Money in the form of currency that can be used immediately for transactions, including coins, currency notes, and money in bank accounts.