The Auditor Is Concerned That the Client Has Committed a Number

question 54

Multiple Choice

The auditor is concerned that the client has committed a number of errors in the capital/repair expenditurdistinction. In selecting items from the repairs expense account for investigation, the most appropriate audit procedure would involve:

• A) random selection.
• B) systematic selection.
• C) tracing.
• D) scanning.

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Definitions:

Credit Sales

Sales transactions in which the purchase amount is charged to the buyer’s account, to be paid at a later date.

Finished Goods Inventory

The stock of completed products that are ready to be sold to customers.

Raw Materials Purchases

The total cost of materials bought for use in the production process, not including any indirect materials.

Raw Material Purchases

The total cost of raw materials bought by a company for use in production during a specific time period.