To Best Ascertain That a Company Has Properly Included Merchandise

question 77

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

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Definitions:

Marginal Benefit

This refers to the additional satisfaction or utility that a person receives from consuming an additional unit of a good or service.

Consumer Surplus

Rephrased: The economic benefit or satisfaction gained by consumers when they pay a price lower than what they are ready to pay for a product or service.

iTunes Download

The action of obtaining digital media files, including music and applications, from Apple's iTunes Store.

Marginal Cost

The cost incurred by producing one more unit of a good or service.