An Auditor May Best Test Commissions Expense for Salespeople When

question 45

Multiple Choice

An auditor may best test commissions expense for salespeople when control risk is low by performing:

• A)Analytical procedures
• B)Tagging and tracing
• C)Alternative procedures.
• D)Subsequent proof of cash.

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Definitions:

LIFO Reserve

The difference between the cost of inventory calculated using the Last-In, First-Out (LIFO) method and the cost calculated using the First-In, First-Out (FIFO) method.

FIFO Costing

First-In, First-Out, an inventory valuation method that assumes that the first items placed in inventory are the first sold.

Cost of Goods Sold

The total direct costs attributable to the production of goods sold by a company, including materials and labor expenses.

Ending Inventory

The total value of goods available for sale at the end of an accounting period after accounting for purchases and sales.