A Retail Store Has a Number of Inventory Adjustments at the End

question 36

Multiple Choice

A retail store has a number of inventory adjustments at the end the last ten accounting periods. What computer audit step should be taken to detect any fraud?

• A) Summarize user access to the sales register
• B) Compare adjustment to inventory to the void/refund transactions summarized by employee
• C) List the top ten employees in sales by location
• D) List the top ten inventory items by sales totals

---

Definitions:

Direct Materials

Raw materials that are directly traceable to the production of a specific good or service and directly incorporated into the final product.

Direct Labor

The wages paid to workers who are directly involved in the production of goods or the provision of services.

Equivalent Units Of Production

A concept in cost accounting that converts units of production into the amount of finished goods units.

Work In Process Inventory

Represents partially finished goods that are in the production process at a given time, between raw materials and finished goods.