An Auditor Traces the Serial Numbers on Equipment to a Nonissuer's

question 35

Multiple Choice

An auditor traces the serial numbers on equipment to a nonissuer's sub-ledger. Which of the following management assertions is supported by this test?

• A)Valuation and allocation.
• B)Completeness.
• C)Rights and obligations.
• D)Presentation and disclosure.

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Definitions:

Mixing Department

A specific section within a manufacturing process where ingredients or components are combined to produce a final product.

Overhead Costs

The indirect costs or expenses of running a business that are not directly tied to the production of goods or services, such as rent, utilities, and office supplies.

Plantwide Overhead Rate

A single overhead absorption rate calculated to allocate all manufacturing overhead costs uniformly across all products.

Machine Hours

A measurement of production time, indicating the total hours that machinery has been operated.