An auditor selected a product recorded in the finished goods perpetual inventory subsidiary account. The auditor went to the warehouse and 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?
A)Existence
B)Completeness
C)Rights and obligations
D)Valuation

Question

Quizplus · Accepted Answer

The auditor is testing the existence of the product by physically counting it in the warehouse and comparing it to the amount recorded in the finished goods perpetual inventory subsidiary account. The existence assertion ensures that the assets and liabilities on a company's balance sheet actually exist and belong to the company.

An Auditor Selected a Product Recorded in the Finished Goods