For Purchasing Inventory Transactions, an Example of a Risk That

question 10

Multiple Choice

For purchasing inventory transactions, an example of a risk that arises is:

• A) goods that have been sold and invoiced are included in the inventory on hand.
• B) the wrong quantities are recorded during the inventory count.
• C) the wrong labour costs are added to the cost of individual inventory items.
• D) the wrong amount is paid against an invoice.

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Definitions:

Stated Value

A nominal value assigned to no-par shares by the issuing company, distinct from market value.

Par Value

The face value of a share of stock, as stated in the corporate charter, which may be unrelated to its market value.

No-Par Value Stock

Stock issued without a specified face value but which may have a stated value assigned by the company.

Stated Value

The value assigned to no-par-value stock by the board of directors of a company, which can then be used as the basis for accounting and legal purposes.