An Auditor, Having Accounted for a Sequence of Inventory Tags

question 34

Multiple Choice

An auditor, having accounted for a sequence of inventory tags, traces information on a representative number of tags to the physical inventory sheets.The purpose of this procedure is to obtain assurance that:

• A)inventory sheets do not include untagged inventory items.
• B)the final inventory is valued at cost.
• C)the inventory listed on the inventory sheets is complete.
• D)all inventory represented by an inventory tag is bona fide.

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Definitions:

Future Benefit

The expected benefit that will be derived from an investment or action in the future, often used in cost-benefit analyses to evaluate potential projects or investments.

Non-posting Account

A non-posting account is an account used in accounting software for transactions that affect reports or balances without affecting the general ledger.

Accounting System

A systematic process of recording, measuring, and communicating financial information about economic entities.

Chart of Accounts

A systematic listing of all ledger account titles and numbers used in a company's accounting system.