Question 1

Selecting a sample of cost accounting reports for labor and vouching it to time records is a procedure designed to test the ASB transaction assertion of

Accepted Answer

A)  occurrence. 
B)  valuation. 
C)  completeness. 
D)  presentation and disclosure. 
A)  occurrence. 
B)  valuation. 
C)  completeness. 
D)  presentation and disclosure.

Question 2

________________________________ are used by the purchasing department to place orders for materials.
Question also found in study guide

Accepted Answer

Material r

Question 3

Which of the following is an internal control weakness for a company whose inventory of supplies consists of a large number of individual items?

Accepted Answer

A)  Supplies of relatively little value are expensed when purchased. 
B)  The cycle basis is used for physical counts. 
C)  The warehouse manager is responsible for maintenance of perpetual inventory records. 
D)  Perpetual inventory records are maintained only for items of significant value. 
A)  Supplies of relatively little value are expensed when purchased. 
B)  The cycle basis is used for physical counts. 
C)  The warehouse manager is responsible for maintenance of perpetual inventory records. 
D)  Perpetual inventory records are maintained only for items of significant value.

Question 4

Cost accounting is responsible for reconciling inventory usage with production.

Accepted Answer

A) True 
 B)False

Question 5

Counting different parts of inventory at different times of the year is called

Accepted Answer

A)  LIFO inventory. 
B)  inventory cutoff. 
C)  cycle counting. 
D)  just-in-time inventory. 
A)  LIFO inventory. 
B)  inventory cutoff. 
C)  cycle counting. 
D)  just-in-time inventory.

Question 6

With a sample of open and closed production cost reports,vouching labor cost to ________________________________ is a test for ____________________________.
Question also found in study guide

Accepted Answer

labor repo

Question 7

An inventory trial balance can be used to scan for __________________________________ and as a population for sample selection for the ______________________________________.
Question also found in study guide

Accepted Answer

unusual conditions ;

Question 8

The function of _________________________________ refers to comparing the physical count of inventory to the perpetual inventory records.
Question also found in study guide

Accepted Answer

periodic r

Question 9

The auditor tests the quantity of materials charged to work-in-process by vouching these quantities to

Accepted Answer

A)  cost ledgers. 
B)  perpetual inventory records. 
C)  receiving reports. 
D)  material requisitions. 
A)  cost ledgers. 
B)  perpetual inventory records. 
C)  receiving reports. 
D)  material requisitions.

Question 10

Which of the following is the assertion with the highest inherent risk in auditing inventory?

Accepted Answer

A)  Completeness. 
B)  Rights. 
C)  Existence. 
D)  Properly classification on the balance sheet. 
A)  Completeness. 
B)  Rights. 
C)  Existence. 
D)  Properly classification on the balance sheet.

Question 11

An auditor would vouch inventory on the inventory status report to the vendor's invoice to obtain evidence concerning management's balance assertions about

Accepted Answer

A)  existence. 
B)  rights and obligations. 
C)  completeness. 
D)  valuation. 
A)  existence. 
B)  rights and obligations. 
C)  completeness. 
D)  valuation.

Question 12

Materials requisitions should be compared in the __________________________________ department with the ______________________________________ on the production order.
Question also found in study guide

Accepted Answer

cost accou

Question 13

The auditors of Mikel's Shops obtained the following information when performing cutoff testing procedures during their observation of Mikel's physical inventory count at December 31,2009:
   When comparing the cutoff information to the sales records,the auditors found that all these shipments were recorded as 2011 sales.The goods shipped on bills of lading 1235 and 1236 were not counted in the inventory,but the goods on bill of lading 1237 and 1238 were included.
Required:
Prepare the appropriate journal entry to correct the cutoff error.

Accepted Answer

The answer of The auditors of Mikel's Shops obtained the...

Question 14

A material error or fraud in inventory typically has a _________________________________ on financial statements.
Question also found in study guide

Accepted Answer

The answer of A material error or fraud in inventory...

Question 15

If overhead is miscalculated so that it is underabsorbed,the result if the error is not corrected will be that

Accepted Answer

A)  inventory will be understated and net income will be overstated. 
B)  inventory and net income will be overstated. 
C)  inventory will be overstated and net income will be understated. 
D)  inventory and net income will be understated. 
A)  inventory will be understated and net income will be overstated. 
B)  inventory and net income will be overstated. 
C)  inventory will be overstated and net income will be understated. 
D)  inventory and net income will be understated.

Question 16

Mary Monitor,CPA,noted that ABC Co.received goods prior to year-end that were included in physical inventory but had not been recorded.In this case,which of the following adjustments should be made?

Accepted Answer

A)  Debit Purchases/credit Cost of Goods Sold. 
B)  None. 
C)  Debit Inventory/credit Accounts Payable. 
D)  Debit Cost of Goods Sold/credit Accounts Payable. 
A)  Debit Purchases/credit Cost of Goods Sold. 
B)  None. 
C)  Debit Inventory/credit Accounts Payable. 
D)  Debit Cost of Goods Sold/credit Accounts Payable.

Question 17

If an auditor was not present at a new client's inventory count,the auditor should require the client to perform another inventory count.

Accepted Answer

A) True 
 B)False

Question 18

A sample from the source documents meets the _____________________________ requirement to determine whether transactions were actually recorded in the inventory records.
Question also found in study guide

Accepted Answer

The answer of A sample from the source documents meets...

Question 19

Which of the following steps would not normally be included in a program for a physical inventory observation?

Accepted Answer

A)  Vouch unit prices to vendors' invoices or other cost records. 
B)  Obtain the client's inventory counting instructions and review them for completeness. 
C)  Inspect the tags used and unused and record the tag numbers used. 
D)  Obtain the numbers of the last five receiving reports and last five shipping documents. 
A)  Vouch unit prices to vendors' invoices or other cost records. 
B)  Obtain the client's inventory counting instructions and review them for completeness. 
C)  Inspect the tags used and unused and record the tag numbers used. 
D)  Obtain the numbers of the last five receiving reports and last five shipping documents.

Question 20

Inventory observation may need to be scheduled on the year-end date,making a large number of test counts if the test of controls ________________________________.
Question also found in study guide

Accepted Answer

reveals we

Selecting a sample of cost accounting reports for labor and vouching it to time records is a procedure designed to test the ASB transaction assertion of

________________________________ are used by the purchasing department to place orders for materials. Question also found in study guide

Which of the following is an internal control weakness for a company whose inventory of supplies consists of a large number of individual items?

Cost accounting is responsible for reconciling inventory usage with production.

Counting different parts of inventory at different times of the year is called

With a sample of open and closed production cost reports,vouching labor cost to ____ is a test for . Question also found in study guide

An inventory trial balance can be used to scan for and as a population for sample selection for the ____. Question also found in study guide

The function of _________________________________ refers to comparing the physical count of inventory to the perpetual inventory records. Question also found in study guide

The auditor tests the quantity of materials charged to work-in-process by vouching these quantities to

Which of the following is the assertion with the highest inherent risk in auditing inventory?

An auditor would vouch inventory on the inventory status report to the vendor's invoice to obtain evidence concerning management's balance assertions about

Materials requisitions should be compared in the department with the ____ on the production order. Question also found in study guide

A material error or fraud in inventory typically has a _________________________________ on financial statements. Question also found in study guide

If overhead is miscalculated so that it is underabsorbed,the result if the error is not corrected will be that

Mary Monitor,CPA,noted that ABC Co.received goods prior to year-end that were included in physical inventory but had not been recorded.In this case,which of the following adjustments should be made?

If an auditor was not present at a new client's inventory count,the auditor should require the client to perform another inventory count.

A sample from the source documents meets the _____________________________ requirement to determine whether transactions were actually recorded in the inventory records. Question also found in study guide

Which of the following steps would not normally be included in a program for a physical inventory observation?

Inventory observation may need to be scheduled on the year-end date,making a large number of test counts if the test of controls ________________________________. Question also found in study guide

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Audits governmental Audits and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 9: Production Cycle

Selecting a sample of cost accounting reports for labor and vouching it to time records is a procedure designed to test the ASB transaction assertion of

________________________________ are used by the purchasing department to place orders for materials. Question also found in study guide

Which of the following is an internal control weakness for a company whose inventory of supplies consists of a large number of individual items?

Cost accounting is responsible for reconciling inventory usage with production.

Counting different parts of inventory at different times of the year is called

With a sample of open and closed production cost reports,vouching labor cost to ________________________________ is a test for ____________________________. Question also found in study guide

An inventory trial balance can be used to scan for __________________________________ and as a population for sample selection for the ______________________________________. Question also found in study guide

The function of _________________________________ refers to comparing the physical count of inventory to the perpetual inventory records. Question also found in study guide

The auditor tests the quantity of materials charged to work-in-process by vouching these quantities to

Which of the following is the assertion with the highest inherent risk in auditing inventory?

An auditor would vouch inventory on the inventory status report to the vendor's invoice to obtain evidence concerning management's balance assertions about

Materials requisitions should be compared in the __________________________________ department with the ______________________________________ on the production order. Question also found in study guide

A material error or fraud in inventory typically has a _________________________________ on financial statements. Question also found in study guide

If overhead is miscalculated so that it is underabsorbed,the result if the error is not corrected will be that

Mary Monitor,CPA,noted that ABC Co.received goods prior to year-end that were included in physical inventory but had not been recorded.In this case,which of the following adjustments should be made?

If an auditor was not present at a new client's inventory count,the auditor should require the client to perform another inventory count.

A sample from the source documents meets the _____________________________ requirement to determine whether transactions were actually recorded in the inventory records. Question also found in study guide

Which of the following steps would not normally be included in a program for a physical inventory observation?

Inventory observation may need to be scheduled on the year-end date,making a large number of test counts if the test of controls ________________________________. Question also found in study guide

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Internal Audits governmental Audits and Fraud Examinations

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

With a sample of open and closed production cost reports,vouching labor cost to ____ is a test for . Question also found in study guide

An inventory trial balance can be used to scan for and as a population for sample selection for the ____. Question also found in study guide

Materials requisitions should be compared in the department with the ____ on the production order. Question also found in study guide