With Respect to a Small Company's System of Purchasing Supplies

question 15

Multiple Choice

With respect to a small company's system of purchasing supplies, an auditor's primary concern should be to obtain satisfaction that supplies ordered and paid for have been

• A) Requested and approved by authorized individuals who have no incompatible duties.
• B) Received, counted, and checked to quantities and amounts on purchase orders and invoices.
• C) Properly recorded as assets and systematically amortized over the estimated useful life of the supplies.
• D) Used in the course of business and solely for business purposes during the year under audit.

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Definitions:

Deductive Reasoning

An analytic approach where an outcome is concluded from the synchronization of several bases presumed to be true.

Inductive Reasoning

A method of reasoning in which general conclusions are drawn from specific observations or instances.

Divergent Thinking

An approach or technique adopted to produce innovative ideas through the examination of numerous potential answers.

Convergent Thinking

A cognitive process in which multiple pieces of information are combined to solve a problem or come up with a single, correct solution.