In an Audit of Inventories, an Auditor Would Least Likely

question 38

Multiple Choice

In an audit of inventories, an auditor would least likely verify that:

• A)all inventory owned by the entity is on hand at the time of the count.
• B)the entity has used proper inventory pricing.
• C)the financial statement presentation of inventories is appropriate.
• D)damaged goods and obsolete items have been properly accounted for.

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Definitions:

Maker

The individual or entity that creates or issues a financial instrument, such as a check or a promissory note.

Note Receivable

A written promise that one party will pay another party a specified sum of money, either on demand or at a set future date.

Promissory Note

A financial instrument in which one party promises in writing to pay a determinate sum of money to the other, either at a fixed or determinable future time or on demand of the payee, under specific terms.

Accounts Receivable

Funds that customers owe to a business for products or services already provided but not yet compensated for.