Question 1

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?

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The answer of The cost accounting department at Blue Manufacturing...

Question 2

With a sample of open and closed production cost reports,vouching labor cost to ________________________________ is a test for ____________________________.

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The answer of With a sample of open and closed...

Question 3

An inventory trial balance can be used to scan for __________________________________ and as a population for sample selection for the ______________________________________.

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The answer of An inventory trial balance can be used...

Question 4

Auditors ______________________________ the inventory taking and make ________________________________,but they seldom _____________________________ the entire inventory.

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The answer of Auditors ______________________________ the inventory taking and make...

Question 5

Prepare an audit plan for the observation of an inventory count.

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The answer of Prepare an audit plan for the observation...

Question 6

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 7

Prepare an audit plan for inventory pricing and compilation.

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The answer of Prepare an audit plan for inventory pricing...

Question 8

Selecting inventory from locations on the warehouse floor,obtaining a test count,and tracing the count to the final inventory compilation produces evidence for the _____________________________ ASB balance assertion.

Accepted Answer

The answer of Selecting inventory from locations on the warehouse...

Question 9

The tests of controls for inventory records would include the following procedures.
A. Existence.
B. Rights and obligations.
C. Completeness.
D. Accuracy and valuations.
E. Presentation and disclosure.

Accepted Answer

The answer of The tests of controls for inventory records...

Question 10

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.

Accepted Answer

The answer of Audit planning requires that the auditor consider...

Question 11

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

Accepted Answer

The answer of Inventory observation may need to be scheduled...

Question 12

Match the examples of specific control assertions in the production cycle with the correct letter of the ASB transaction assertions.

Accepted Answer

The answer of Match the examples of specific control assertions...

Question 13

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

Accepted Answer

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

Question 14

The physical observation procedures for inventory are principally designed to audit for the balance assertions of ____________________________,____________________________,and ____________________________.

Accepted Answer

The answer of The physical observation procedures for inventory are...

Question 15

The tests of controls for inventory records would include the following procedures.
A. Existence.
B. Rights.
C. Completeness.
D. Valuation.
E. Presentation and disclosure.

Accepted Answer

The answer of The tests of controls for inventory records...

Question 16

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

Accepted Answer

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

Question 17

Explain briefly the two directions of inventory test counts.
A. Basic transaction files to perpetual inventory records (completeness assertion).
B. Perpetual inventory records to the detail source documents (existence or occurrence assertion).

Accepted Answer

The answer of Explain briefly the two directions of inventory...

Question 18

A sample from the perpetual inventory records meets the _____________________________ requirement to determine whether all recorded transactions are supported by reports and documents.

Accepted Answer

The answer of A sample from the perpetual inventory records...

Quiz 9: Production Cycle

With a sample of open and closed production cost reports,vouching labor cost to ____ is a test for .

An inventory trial balance can be used to scan for and as a population for sample selection for the ____.

Auditors __ the inventory taking and make ,but they seldom _ the entire inventory.

Prepare an audit plan for the observation of an inventory count.

Prepare an audit plan for inventory pricing and compilation.

Selecting inventory from locations on the warehouse floor,obtaining a test count,and tracing the count to the final inventory compilation produces evidence for the _____________________________ ASB balance assertion.

The tests of controls for inventory records would include the following procedures. A. Existence. B. Rights and obligations. C. Completeness. D. Accuracy and valuations. E. Presentation and disclosure.

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

Match the examples of specific control assertions in the production cycle with the correct letter of the ASB transaction assertions.

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

The physical observation procedures for inventory are principally designed to audit for the balance assertions of ,,and .

The tests of controls for inventory records would include the following procedures. A. Existence. B. Rights. C. Completeness. D. Valuation. E. Presentation and disclosure.

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

Explain briefly the two directions of inventory test counts. A. Basic transaction files to perpetual inventory records (completeness assertion). B. Perpetual inventory records to the detail source documents (existence or occurrence assertion).

A sample from the perpetual inventory records meets the _____________________________ requirement to determine whether all recorded transactions are supported by reports and documents.