ch09 - ch09 Student 1 Most businesses try to estimate sales levels and seasonal timing and then try to plan production schedules to meet customer demand

ch09 - ch09 Student 1 Most businesses try to estimate sales...

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ch09Student: ___________________________________________________________________________1.Most businesses try to estimate sales levels and seasonal timing and then try to plan production schedules to meet customer demand. True False2.Production planning interacts with inventory planning to produce production orders. True False3.Forecasts of the following year can be used in connection with valuing the inventory at lower of cost or market, which influences the amount of cost of goods sold that is shown in the financial statements. True False4.Based on the production orders, management develops a plan for the amount and timing of production. True False5.Standard costing of inventory is a generally accepted accounting principle. True False6.If control risk is assessed very low, cost accumulations will require additional substantive procedures to lower the risk of failing to detect material misstatements in inventory. True False7.The audit procedures for inventory and related cost of sales accounts frequently are typically extensive in an audit engagement. True False8.In general, the auditors' best opportunity to detect inventory errors and frauds is during the physical observation of the inventory count. True False9.When inventory quantities are determined solely by means of a physical count, it is necessary for the auditor to be present at the time of the count. True False10.When inventory is counted on a date other than the balance-sheet date, no additional procedures would normally be required to satisfy generally accepted auditing standards. True False11.The auditors must be present during some counting operations to evaluate cycle inventory counting plans and the execution. True False12.If an auditor was not present at a new client's inventory count, the auditor has no obligation to test the inventory. True False13.If inventory located off the client's premise, the auditor might confirm the amount with the custodian to satisfy evidence requirements. True False
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14.A client's physical count of inventories was higher than the inventory quantities shown in the perpetual records. This situation could be the result of the failure to record A. Sales.B. Sales discounts.C. Purchases.D. Purchase discounts.15.The audit procedures used in an observation of the client's physical inventory taking are designed primarily to
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  • Spring '12
  • janigrt
  • perpetual inventory records, Cycle count

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