Question 1

Auditors ______________________________ the inventory taking and make ________________________________,but they seldom _____________________________ the entire inventory.
Reference: Question also found in study guide

Accepted Answer

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

Question 2

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

Accepted Answer

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

Question 3

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 4

Prepare an audit plan for inventory pricing and compilation.

Accepted Answer

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

Question 5

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?

Accepted Answer

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

Question 6

A sample from the perpetual inventory records meets the _____________________________ requirement to determine whether all recorded transactions are supported by reports and documents.
Reference: Question also found in study guide

Accepted Answer

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

Question 7

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 8

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

Accepted Answer

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

Question 9

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

Accepted Answer

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

Question 10

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.For each of the procedures,choose the letter of the correct ASB balance assertion(s).Only one letter per procedure should be used. -----$ \quad $1. Test counted inventory and traced the count to the perpetual inventory record.
-----$ \quad $2. Selected a sample of inventory items from the perpetual records and vouch additions to receiving reports.
-----$ \quad $3. Reviewed a sample of vendor invoices for prices paid for inventory.
-----$ \quad $4. Review inventory footnote for the financial statements.
-----$ \quad $5. Reviewed vendor invoices and purchase orders for terms of the contract.

Accepted Answer

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

Question 11

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.
Reference: Question also found in study guide

Accepted Answer

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

Question 12

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. $$\begin{array} { | l | r | r | r | r | } 
\hline \text { Bill of Lading Number } & 1235 & 1236 & 1237 & 1238 \
\hline \text { Date } & 12 / 31 / 11 & 12 / 31 / 11 & 1 / 2 / 11 & 1 / 2 / 11 \
\hline \text { Sales price } & \$ 12,000 & \$ 4,500 & \$ 18,000 & \$ 16,000 \
\hline \text { Cost of goods } & \$ 9,000 & \$ 3,000 & \$ 12,000 & \$ 12,000 \
\hline
\end{array}$$

Accepted Answer

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

Question 13

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

Accepted Answer

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

Question 14

The physical observation procedures for inventory are principally designed to audit for the balance assertions of ____________________________,____________________________,and ____________________________.
Reference: Question also found in study guide

Accepted Answer

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

Question 15

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

Accepted Answer

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

Question 16

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

Accepted Answer

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

Question 17

The tests of controls for inventory records would include the following procedures.
A.Existence.
B.Rights.
C.Completeness.
D.Valuation.
E.Presentation and disclosure.For each of the procedures,choose the letter of the correct PCAOB assertion(s).Only one letter per procedure should be used. -----$ \quad $1. Trace a sample of sales invoices to perpetual inventory record entry of issue.
-----$ \quad $2. Select a sample of inventory item from perpetual records and vouch additions to receiving reports.
-----$ \quad $3. Select a sample of shipping documents and review the accounting summary of the quantities and prices.
-----$ \quad $4. Trace posting of sample of sales invoices to amounts in general ledger.
-----$ \quad $5. Review the appropriateness of standard costs to price inventory issues and cost of goods sold.

Accepted Answer

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

Quiz 9: Production Cycle

Auditors __ the inventory taking and make ,but they seldom _ the entire inventory. Reference: Question also found in study guide

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

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).

Prepare an audit plan for inventory pricing and compilation.

A sample from the perpetual inventory records meets the _____________________________ requirement to determine whether all recorded transactions are supported by reports and documents. Reference: Question also found in study guide

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

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

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. Reference: Question also found in study guide

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

The physical observation procedures for inventory are principally designed to audit for the balance assertions of ,,and . Reference: 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 ____. Reference: Question also found in study guide

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

Quiz 9: Production Cycle

Auditors ______________________________ the inventory taking and make ________________________________,but they seldom _____________________________ the entire inventory. Reference: Question also found in study guide

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

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).

Prepare an audit plan for inventory pricing and compilation.

A sample from the perpetual inventory records meets the _____________________________ requirement to determine whether all recorded transactions are supported by reports and documents. Reference: Question also found in study guide

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

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

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. Reference: Question also found in study guide

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

The physical observation procedures for inventory are principally designed to audit for the balance assertions of ____________________________,____________________________,and ____________________________. Reference: 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 ______________________________________. Reference: Question also found in study guide

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

Auditors __ the inventory taking and make ,but they seldom _ the entire inventory. Reference: Question also found in study guide

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

The physical observation procedures for inventory are principally designed to audit for the balance assertions of ,,and . Reference: 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 ____. Reference: Question also found in study guide