Which of the Following Is an Accurate Statement Regarding Inventory

question 6

Multiple Choice

Which of the following is an accurate statement regarding inventory and risk?

• A) Inventory with a high business risk includes products with potential obsolescence.
• B) Auditors often have a greater concern for misstatements when inventory is stored in one warehouse.
• C) Inherent risk is generally set at low for manufacturing companies.
• D) Performance materiality for inventory is determined before assessing client business risk.

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Definitions:

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SmartArt

A graphic diagram tool included in Microsoft Office programs that provides a visual representation for information.

Shape

An element of design defined by its boundaries and form, which can be geometric or organic, used in various creative and technical fields.

PivotTable

A feature in spreadsheet software that allows users to summarize, analyze, explore, and present summary data.