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Chapter 21 - Chapter 21 Multiple-Choice Questions 1 easy b...

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Chapter 21 Multiple-Choice Questions 1. easy b Receipt of ordered materials by the receiving department will generate the completion of a form called the: a. bill of lading. b. receiving report. c. materials requisition. d. inventory acquisition summary. 2. easy c The audit of ______ is often the most difficult and complex part of an audit. a. property, plant and equipment b. cash c. inventory d. prepaid insurance 3. easy d Inventory is a complex area to audit for all but which of the following reasons? 4. easy b When labor is a significant part of inventory, verifying the proper accounting of these costs should be tested in the: 5. easy a For retail and wholesale businesses, the most important inventory is: 6. easy b The audit procedure “observe the client taking a physical inventory count and test the count” is sufficient to determine all of the following except: a. whether recorded inventory actually exists. b. whether recorded inventory was properly valued by the client. c. whether recorded inventory was properly counted by the client. d. whether client inventory instruction had properly been followed. 7. easy d In most manufacturing companies, the inventory and warehousing cycle begins with the: 8. easy c The audit tests to verify that the client is using an inventory method which is generally accepted and to verify that physical counts were correctly summarized are performed during the audit of the: Arens/Elder/Beasley
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9. Which of the following would be an appropriate initiation of a purchase requisition? easy a One initiated based on a periodic count of raw materials. One initiated by stockroom personnel as raw materials are needed.
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