An Auditor Who Wished to Test for the Existence or Occurrence

question 43

Multiple Choice

An auditor who wished to test for the existence or occurrence of inventory would most likely select a sample of inventory items from the perpetual records and

• A)trace additions to the general ledger.
• B)vouch additions to receiving reports.
• C)vouch additions to sales invoices.
• D)trace receipts to receiving reports.

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Definitions:

Monopolist

An individual or entity that has exclusive control over the supply or trade of a commodity or service in a particular market.

Economic Efficiency

A condition in which resources are distributed in a manner that optimizes the creation of goods and services while minimizing expenses.

Demand Conditions

The market requirements and consumer preferences that influence the demand for goods and services, including price, quality, and accessibility.

Cost Conditions

The factors that influence the expenses associated with producing goods and services, including materials, labor, and overhead.