An Auditor Who Wished to Test for the Existence or Occurrence

question 59

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:

Contract

A legally binding agreement between two or more parties that outlines obligations and rights of those parties.

Recognizance

An obligation in which a party acknowledges in court that he or she will perform some specified act and/or pay a price on failure to do so.

Bail

A thing of value, such as a money bail bond or any other form of property, that is given to the court to allow a person’s temporary release from jail and to ensure his or her appearance in court.

Offeree

A person or entity to whom an offer is made, which they can either accept or reject.