It Is the Auditor's Job to Review the Client's Estimate

question 79

Multiple Choice

It is the auditor's job to review the client's estimate of obsolete inventory to evaluate whether the ending inventory balance has been determined in accordance with the applicable financial reporting framework.To do this,the auditor considers whether the inventory balance includes

• A)only inventory the client expects to sell in the future
• B)inventory that the client does not own
• C)inventory that has not been paid for at the end of the year
• D)inventory valued at the lower of cost or market
• E)both A and C
• F)both A and D
• G)both D and E

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Definitions:

Sleeve Bearings

Bearings consisting of a cylindrically shaped liner that allows for relative motion by sliding, used in various machinery for rotational or sliding movements.

Porous Materials

Materials characterized by the presence of pores or voids, making them permeable to liquids or gases.

Cast Materials

Materials that have been shaped by pouring them into a mold while liquid and allowing them to solidify.

Unified National Coarse

A thread standard that specifies the shape, dimensions, and tolerances for coarse threads used broadly in bolts, nuts, and screws in the United States.