Exam 9: Production Cycle

When a job is completed,the foreperson typically prepares a completion report,a copy of which is sent to or kept in the following departments except

A production order usually includes a ________________________________.

An auditor selected a product maintained in the finished goods warehouse.The auditor counted the product and compared this amount with the amount in the finished goods perpetual inventory subsidiary account.Which ASB balance assertion is the auditor most likely testing?

Tracing production cost accumulation forward into the production cost reports in the cost accounting department is a test for ____________________________.

The audit procedures used in an observation of the client's physical inventory taking are designed primarily to

Which of the following procedures would best prevent or detect the theft of valuable items from an inventory that consists of hundreds of different items selling for $1 to $10 and a few items selling for hundreds of dollars?

A cutoff test reveals goods received and counted in inventory but not recorded in purchases.The effect on the financial statements is

The audit procedures for inventory and related cost of sales accounts frequently are typically extensive in an audit engagement.

To determine the client's planned amount and timing of production of a product,the auditor will review the

When auditing inventories,an auditor would least likely verify that

To gain assurance that all inventory items in a client's inventory listing schedule are valid,an auditor most likely would trace

The cost accounting department at Blue Manufacturing Company receives various types of information at the end of each week.The production floor reports time and production work data directly to the cost accounting department.Also,the payroll department sends labor cost data to the cost accounting department.What is the cost accounting department likely to do with this information? Why?

Audit planning requires that the auditor consider possible inventory errors or frauds that might occur that could affect the financial statements.For each of the types of inventory errors listed in the following table,indicate what would be the possible effect in the inventory and cost of sales accounts: overstated,understated,or no effect.

An increase in inventory turnover probably indicates

From the auditors' point of view,inventory counts are more acceptable prior to the year end when

A retailer's physical count of inventory was higher than that shown by the perpetual records.Which of the following could explain the difference?

Production reports of finished units should be signed by the __________________________________ and finished goods inventory custodian and forwarded to _______________________________.

The typical functions of the production and conversion cycle do not include

Standard costing of inventory is a generally accepted accounting principle.

A material error or fraud in inventory typically has a _________________________________ on financial statements.