The Applicable Financial Reporting Framework Allows the Audit Client to Determine

question 16

Multiple Choice

The applicable financial reporting framework allows the audit client to determine both the cost and market value of inventory.Select the correct item(s) from the following list regarding these determinations:

• A)The client must use FIFO to determine the cost of inventory at year-end.With FIFO,the client determines the cost of good sold using the earliest inventory items purchased.
• B)The client must use FIFO to determine the cost of inventory at year-end.With FIFO,the client determines the cost of good sold using the latest inventory items purchased.
• C)The client determines the market value of the inventory by using the last purchase price of the inventory item to estimate the market value.
• D)The client determines the market value of inventory by estimating the amount the inventory can be sold for at the end of the year.

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Definitions:

Continuous Supervision

The management practice of closely monitoring employees' work and performance without significant breaks.

Tolerance

The willingness to accept and respect differences in opinions, beliefs, and practices without judging or persecuting them.

Ethnocentric Staffing

A human resource strategy where companies employ individuals from their home country to work in their operations abroad.

Job Embeddedness

Describes the extent to which an employee feels connected to their job and company, through networks, fit, and what they would have to sacrifice if they left.