In Which of the Following Situations Would the Auditor Most

question 64

Multiple Choice

In which of the following situations would the auditor most likely issue an unqualified report?

• A)The client valued ending inventory by using the replacement cost method.
• B)The client valued ending inventory by using the Next-In-First-Out (NIFO)method.
• C)The client valued ending inventory at selling price rather than historical cost.
• D)The client valued ending inventory by using the First-In-First-Out (FIFO)method, but showed the replacement cost of inventory in the Notes to the Financial Statements.

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Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good.

Fresh Fish

Fish that have been recently caught and have not been frozen or processed.

Total Revenue

Total Revenue is the full amount of money received by a company for its goods or services, before any expenses are subtracted.

Equilibrium Price

The price at which the quantity of goods supplied is equal to the quantity of goods demanded in a market.