Which of the Following Would the Auditor Most Likely Do

question 69

Multiple Choice

Which of the following would the auditor most likely do when testing the existence assertion for inventory?

• A)Observe the client's count of the annual physical inventory and perform test counts.
• B)Review vendor invoices for the amounts recorded.
• C)Review open purchase orders at year-end.
• D)Trace raw material purchases to invoices and to the general ledger.

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Definitions:

Budgeted Disbursements

Planned financial outflows or payments calculated in advance as part of a budgeting process, often categorized and scheduled over a specific period.

Desired Balance

The target or goal for the balance of an account or budget at a specific point in time.

Budgeted Receipts

Expected cash or revenue amounts a business plans to receive over a certain period according to its budget.

Merchandise Inventory

Merchandise inventory includes goods held by a company that are ready for sale to customers.