Which of the Following Would Be Considered a Performance Audit

question 112

Multiple Choice

Which of the following would be considered a performance audit under the Government Auditing Standards?

• A) An investigation into whether a purchasing department of a government was operated efficiently.
• B) An investigation into whether a social service agency of a state government improved the lives of its clients.
• C) Both A and B above.
• D) Neither A nor B above.

---

Definitions:

Net Income

The net income of a business, which is obtained by deducting all costs and taxes from its total revenue.

Physical Count

The actual tallying of inventory goods a company has on hand to verify stock levels and assess the need for adjustment in accounting records.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated by adding purchases to beginning inventory and subtracting cost of goods sold.

Cost Of Goods Sold

Expenses directly tied to the production process of goods a company markets.