For Each of the Following, State Whether It Is a Test

question 34

Essay

For each of the following, state whether it is a test of details of account balances or a test of details of disclosures. Then note for which assertion the test provides evidence.
1. Inspect loan agreements under which an entity's inventories are pledged.
2. Review inventory compilation for proper classification among raw materials, work in process, and finished goods.
3. Observe the count of physical inventory.
4. Trace test counts and tag control information to the inventory compilation.
5. Inquire of management about issues related to LIFO liquidations.
6. Review book-to-physical adjustments for possible misstatements.

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Definitions:

Dementia

A category of brain diseases that cause a long term and often gradual decrease in the ability to think and remember, significantly affecting daily functioning.

Charged With Negligence

Accused of failing to provide the necessary care or action required in a specific situation, resulting in harm or risk.

Reasonable Care

The standard of care expected to be exercised by a reasonable person under similar circumstances to prevent harm or injury.

Inadequate Referral

A referral that does not suitably match the client's needs, either due to the referred professional's lack of expertise, resources, or appropriateness for the client’s issue.