The physical count of inventory of a retailer Which of the following could expla

Question

The physical count of inventory of a retailer Which of the following could explain the differe a. was higher than shown by the records nee? Several bill-and-hold inventory items were not counted but the tags placed on the items had been taken off the items and added to the perpetual records records. No journal entry had been made on the retailer's books for several items returned to b. Credit memos for several items returned by customers had not been reflected in the perpetual its suppliers d. Several consignment-in items had not arrived at the date of the inventory count and had not been reflected in the perpetual records. 6 Which of the following types of industry specific inventory would an auditor ordinarily not require the assistant of a specialist? Raw materials such as steel pylons in calculating the percentage of completion of a complex a. construction project. b. Raw materials such as meat that are weighed on a scale before being processed. c. Raw materials such as sapphires used in the manufacturing processes of precious jewelries. d. Raw materials such as lumber that are ordinarily stored outdoor. 7 After an auditor has performed test counts of inventory during physical inventory count observation, the auditor traced the tests counts to the client's inventory listing, and then to the perpetual inventory records. This TOB procedure concerns the management's assertion of a. rights and obligation. b. existence or occurrence. c. completeness. d. valuation or allocation. Chapter 16 Payroll cycle-Tests of controls and tests of balances 8. Which of the following documents would the auditor least likely seek in order to understand the personnel function of a client's payroll cycle? a. W-4 form that shows withholding of federal and state income taxes. b. Form 941 that shows local, state, and federal payroll taxes. c. Form 1120 that shows corporate income tax returns. d. Form 1040 that shows personal income tax returns.

Explanation / Answer

Question:5

Any goods returned by the customer earlier issue should be reversed.IN the abscence of such reversal:inventory records accounts for the issue of goods where in actual movement of the goods will be nullified.That will be result in mismatch of the inventory and actual inventory will be higher than what is shown in records

Answer: B

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