24.While observing a client's annual physical inventory, an auditor recorded test counts for several items and noticed that certain test counts were higher than the recorded quantities in the client's perpetual records. This situation could be the result of the client's failure to record A. Purchase discounts.B. Purchase returns.C. Sales.D. Sales returns. 25.To gain assurance that all inventory items in a client's inventory listing schedule are valid, an auditor most likely would trace 26.Selecting a sample of cost accounting reports for labor and vouching it to time records is a procedure designed to test the ASB transaction assertion of 27.Your client plans to count inventory at several locations on the same day. No location is material in amount, but the total of inventory is quite material. How is an auditor likely to plan to observe? 28.Generally accepted accounting principles (GAAP) require that inventory be recorded at A. The lower of cost or fair market value.B. The lower of cost or net realizable value.C. The higher of cost or net realizable value less a normal profit (floor).D. None of the above.29. If overhead is miscalculated so that it is underabsorbed, the result if the error is not corrected will be that
30.Which of the following steps would notnormally be included in a program for a physical inventory observation?
- Spring '12
- perpetual inventory records, Cycle count