While Observing a Client's Annual Physical Inventory, an Auditor Recorded

question 25

Multiple Choice

While observing a client's annual physical inventory, an auditor recorded test counts for several items and noticed that certain test counts were higher than the recorded quantities in the client's perpetual records. This situation could be the result of the client's failure to record

• A)purchase discounts.
• B)purchase returns.
• C)sales.
• D)sales returns.

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Definitions:

Restraints Against Trade

Actions or regulations that restrict, limit, or impede the free flow of trade and competition in the market.

Different Levels

Different levels refer to varying degrees or stages in a hierarchy, system, or classification.

Vertical

Relating to a structure or position that is straight up and down, in alignment with the direction of gravity.

Horizontal Restraint

involves agreements among competitors operating at the same level of the market or supply chain to limit competition or manipulate market conditions.