You Are Auditing Raji and Company

question 104

Multiple Choice

You are auditing Raji and Company. You discover an item of inventory with an audited value of $5,000 with a recorded amount of $3,000. If this is the only error you discover, the projected misstatement for the sample would be

• A) $5,000.
• B) $2,000.
• C) $3,000.
• D) $4,000.

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Definitions:

Direct Materials Budget

An estimation of the type and amount of materials required to meet production goals, along with the projected cost.

Quantity

The amount or number of a material or product, which can be measured or counted.

Cost Data

Information related to the expenses incurred in the production of goods or services, including material, labor, and overhead costs.

Not-For-Profit Organization

An organization that does not operate for the benefit of private interests and focuses on serving a public or mutual cause.