The First Step in Verifying the Valuation of Purchased Inventory

question 60

Multiple Choice

The first step in verifying the valuation of purchased inventory is in determining the valuation method used by the client. The next step is

• A) determining that all inventory that is purchased is expensed through cost of goods sold.
• B) determining which costs should be included in the valuation of an item of inventory.
• C) determining that all inventory on hand reconciles to the perpetual inventory records.
• D) determining that cut-off procedures have been adhered to prior to counting inventory.

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Definitions:

Maker

In finance, often refers to the original issuer of a promissory note or check responsible for payment.