For the Purpose of Determining Proper Cutoff for Inventory, the Auditor

question 58

Multiple Choice

For the purpose of determining proper cutoff for inventory, the auditor will select a sample from which of the following for a few days before and after year-end?

• A)Materials requisitions.
• B)Production schedules.
• C)Receiving documents.
• D)Purchase orders.

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Definitions:

Equilibrium Quantity

The quantity of a good or service at which supply equals demand, and the market is in balance, without any excess supply or shortage.

Perfectly Elastic

A situation in economics where the quantity demanded or supplied changes infinitely in response to any change in price.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded by consumers at various prices.

Higher Price

An increase in the cost of a good or service, often reflecting factors like demand and supply changes, production costs, or market conditions.