To BEST Ascertain That a Company Has Properly Included Merchandise

question 75

Multiple Choice

To BEST ascertain that a company has properly included merchandise that it owns in its ending inventory, the auditor should review and test the:

• A) contractual commitments made by the purchasing department.
• B) purchase invoices received on or around year-end.
• C) purchase cutoff procedures.
• D) terms of the open purchase orders.

---

Definitions:

Tangible Objects

Physical items that can be seen, touched, and occupied in space, as opposed to abstract concepts or digital items.

Cognitive Development

The process of growth and change in intellectual/mental abilities such as thinking, reasoning, and understanding.

Understanding Conservation

The cognitive ability to recognize that quantity or amount does not change when its form or appearance is altered.

Cognitive Development

The process by which an individual's ability to think, understand, and interact with the world evolves throughout life.