Exam 12: Inventories and Cost of Goods Sold

Which of the following is not a procedure that typically is used by the auditors in their examination of a client's goods held in the custody of a public warehouse?

Assume that you have completed your procedures on the audit of Glick Corporation and have found the following audit issues.Indicate the account balance financial statement assertion that is likely to be most impacted by each of the issues,using the following key: 1.It appears that the selling price of certain of the company's products has declined significantly. 2.In performing a price test of inventory items,you found a number of items priced below cost. 3.It was discovered that a number of the items on hand and counted in the inventory were on consignment. 4.Inventory items were stored in three different warehouses and the auditors fear that some items might be in an undisclosed fourth warehouse. 5.During the physical inventory it was noted that a number of inventory items were damaged 6.Some inventory items owned by the company were in transit during the physical inventory.

An auditor performs a test to determine whether all merchandise for which the client was billed was received.The population for this test consists of all:

Which of the following is an auditor least likely to consider a departure from U.S.generally accepted accounting principles?

The receiving department should accept only goods for which there is an approved purchase order on hand.

The use of a "blind" purchase order is designed to prevent errors by the:

To measure how effectively a client employs its assets,an auditor calculates inventory turnover by dividing the average inventory into:

Which of the following is true about the auditors' observation of the client's physical inventory?

The proper cutoff of inventories is best achieved when the client uses prenumbered purchase orders.

The client's physical count of inventories is lower than the inventory quantities in the perpetual records.This could be the result of a failure to record:

In auditing a client's inventory,the auditors must be concerned with the detection of goods that are both damaged and obsolete. a.Why are the auditors concerned with detecting damaged and obsolete goods? b.How do the auditors test for damaged goods in the client's inventory? c.How do the auditors test for obsolete goods in the client's inventory?

To best ascertain that a company has properly included merchandise that it owns in its ending inventory,the auditors should review and test the:

Auditors should not review the client's planning of the physical inventory.

A client uses a periodic inventory system.Would one expect a credit to which of the following accounts at the point of sale? Sales Inventory A) Yes Yes B) Yes No C) No Yes D) No No

Which of the following is least likely to be accurate statement concerning characteristics of an audit?

In auditing a manufacturing entity,which of the following procedures would an auditor least likely perform to determine whether slow-moving,defective,and obsolete items included in inventory are properly identified?

A "bill and hold" scheme is most likely to include:

Which one of the following procedures would not be appropriate for the auditors in discharging their responsibilities concerning the client's physical inventories?

Which of the following is not a part of the auditors' responsibility when a client's count of its inventory?