When the Client's Physical Inventory Takes Place Before the Last

question 33

Multiple Choice

When the client's physical inventory takes place before the last day of the year, it is still necessary to perform an accounts payable cutoff at the time of the physical count.In addition, the auditor must verify whether all acquisitions taking place between the physical count and the end of the year were added to:

• A) accounts payable and cost of goods sold.
• B) the physical inventory and accounts payable.
• C) the physical inventory.
• D) accounts payable.

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Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, indicating the sensitivity of consumers to price changes.

Elastic

Describes a situation where the quantity demanded or supplied of a good responds significantly to changes in its price.

Patent

A legal right granted by a government to an inventor, giving exclusive rights to use, make, and sell an invention for a certain period of time.

Inelastic Demand

A situation in which the demand for a product does not increase or decrease significantly when the price changes.