The Test of Details of Balance Procedure Which Requires the Auditor

question 119

Multiple Choice

The test of details of balance procedure which requires the auditor to perform tests of lower of cost or market, selling price, and obsolescence is an attempt to satisfy the objective of

• A) existence.
• B) completeness.
• C) accuracy.
• D) realizable value.

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Definitions:

Consumer Surplus

The discrepancy between the total price consumers are ready to pay for a good or service and what they actually pay for it.

Producer Surplus

The disparity between the price at which sellers are prepared to offer a product and the actual selling price they get.

Consumer Surplus

The difference between the highest amount a consumer is willing to pay and the actual price paid.

Supply Shift

A change in the quantity of a good that suppliers are willing and able to sell at each price, represented by a shift of the supply curve to the left or right.