What Type of Transactions Ordinarily Have High Inherent Risk Because

question 11

Multiple Choice

What type of transactions ordinarily have high inherent risk because they involve management judgments or assumptions in formulating accounting balances?

• A)Estimation.
• B)Nonroutine.
• C)Qualified.
• D)Routine.

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Definitions:

Goods Purchased

The total value or volume of raw materials, components, or finished products acquired by a business for resale or production.

Production Budget

A detailed plan showing the number of units that must be produced during a period in order to satisfy both sales and inventory needs.

Ending Inventory

The value of goods available for sale at the end of an accounting period.

Units

A measurement of quantity representing how many pieces, items, or parts are considered in transactions, production, or inventory counts.