Independent internal verification of the physical inventory process occurs when

Independent internal verification works to make sure your employees are following the rules and not shortcutting internal controls. Unlike an external audit, which focuses on financial statement analysis, internal verification analyzes internal accounting controls. In a small business, “independent” means people not associated with the accounting department -- such as you and a manager from another department -- supervise the audit.

Goals and Objectives

1. The goals of independent verification are to audit and, when necessary, modify and improve the effectiveness of internal accounting controls and standard operating procedures. The objective is to make sure accounting procedures support goals in your financial risk management plan. The two-step process typically starts by observing, reviewing and analyzing current standard operation procedures. Following this, a process of comparing and verifying your results against established internal control objectives determines whether audit results align with accounting policies and procedures or whether remedial actions are necessary.

Observation and Review

1. Observation and review includes both indirect and direct techniques. Indirect techniques work behind the scene to avoid disrupting daily accounting activities. Steps include reviewing the accounting department organizational chart, manuals and departmental control policies. Audit trails trace randomly selected accounting transactions from beginning to end. Direct techniques include personal interviews and process observations. Most often, the time you spend interacting with accounting employees directly corresponds to questions or red flags uncovered during the indirect review.

Analysis and Verification

1. After observations and data collection are complete, you apply substantive procedures to analyze the data, and you verify whether work products contain data entry or other errors and whether employees are following established rules. Substantive procedures are among the most important verification tools used in an internal audit. These include financial transaction matching, a physical inventory count, audit trail reviews and recalculating previously reconciled financial statements, such as last month’s unadjusted and adjusted trial balances or last month’s bank reconciliation.

Finishing the Audit

1. A final report and meeting with the accounting department manager marks the end of internal verification. The final report outlines how you conducted the audit, describes audit findings and details areas where remedial actions are necessary to improve internal controls. For example, you might verify deficiencies in authorization controls, such as approving invoice payments or employee time cards without a thorough review, or you might verify that employees are violating security controls by failing to lock their computers before leaving their workstations.

INVENTORIES

SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM’S TAXONOMY

Item SO BT Item SO BT Item SO BT Item SO BT Item SO BT

True-False Statements

1. 1 C 8. 2 C 15. 3 K a22. 7 C sg29. 3 C
2. 1 C 9. 2 C 16. 3 C a23. 7 K sg30. 4 K
3. 1 K 10. 2 C 17. 4 K a24. 8 K sg31. 5 K
4. 1 K 11. 2 K 18. 4 K a25. 8 K sg,a32. 7 K
5. 1 K 12. 3 K 19. 5 C sg26. 1 C sg,a33. 8 K
6. 2 K 13. 3 K 20. 5 K sg27. 2 K
7. 2 K 14. 3 K 21. 6 C sg28. 2 K

Multiple Choice Questions

1. 1 K 58. 2 C 82. 3 AP 106. 3 K a130. 7 AP
2. 1 K 59. 2 K 83. 3 AP 107. 3 C a131. 7 C
3. 1 K 60. 2 K 84. 2 AP 108. 3 AP a132. 7 C
4. 1 K 61. 2 AP 85. 2 AP 109. 3 AN a133. 7 AP
5. 1 K 62. 2 C 86. 2 AP 110. 3 AN a134. 8 C
6. 1 K 63. 2 K 87. 2 AP 111. 3 K a135. 8 C
7. 1 C 64. 2 K 88. 2 AP 112. 4 K a136. 8 C
8. 1 C 65. 2 K 89. 2 AP 113. 4 K a137. 8 AP
9. 1 C 66. 2 K 90. 2 AP 114. 4 K a138. 8 AP
10. 1 K 67. 2 C 91. 2 AP 115. 4 K a139. 8 AP
11. 1 C 68. 2 C 92. 2 AP 116. 4 K st140. 1 K
12. 1 C 69. 2 K 93. 3 AP 117. 4 AP sg141. 1 K
13. 1 K 70. 2 K 94. 3 AP 118. 5 C st142. 2 K
14. 1 K 71. 2 AP 95. 3 AP 119. 5 AN sg143. 2 AP
15. 2 K 72. 2 AP 96. 3 AP 120. 5 AN st144. 3 K
16. 2 C 73. 3 AP 97. 3 K 121. 5 AN sg145. 3 C
17. 2 C 74. 2 AP 98. 3 C 122. 5 C st146. 4 K
18. 2 AP 75. 2 AP 99. 3 C 123. 6 K sg147. 5 AN
19. 2 K 76. 2 AP 100. 3 C 124. 6 K st148. 6 K
20. 2 AP 77. 3 AP 101. 3 C 125. 6 AP sg,a149. 8 AP
21. 2 AP 78. 2 AP 102. 3 K 126. 6 AP
22. 2 AP 79. 2 AP 103. 3 K 127. 6 AP
23. 2 AP 80. 2 AP 104. 3 C a128. 7 AP
24. 2 AP 81. 2 AP 105. 3 K a129. 7 AP

Brief Exercises

150. 1 C 152. 2 AP 154. 2 AP 156. 2 K 158. 5 C

151. 2 AP 153. 2 AP 155. 2 AP 157. 4 AP 159. 6 AP

sg This question also appears in the Study Guide. st This question also appears in a self-test at the student companion website. a This question covers a topic in an appendix to the chapter.

Test Bank for Accounting Principles, Eighth Edition 6 - 2

SUMMARY OF QUESTIONS BY STUDY OBJECTIVES AND BLOOM’S TAXONOMY

Exercises

1. 2 AP 165. 3 AP 170. 5 AP a175. 7 AP a180. 8 AP
2. 2 AP 166. 3 E 171. 5 AN a176. 7 AP
3. 2 AN 167. 4 AN 172. 5 AN a177. 8 AP
4. 2 AP 168. 4 AP 173. 5 AN a178. 8 AP
5. 2 AP 169. 4 AP 174. 6 AP a179. 8 AP

Completion Statements

181. 1 K 183. 2 K 185. 2 K 187. 3 K 189. 6

1. 1 K 184. 2 K 186. 3 K 188. 4 K a190. 8

SUMMARY OF STUDY OBJECTIVES BY QUESTION TYPE

Item Type Item Type Item Type Item Type Item Type Item Type Item Type Study Objective 1

1. TF 5. TF 36. MC 40. MC 44. MC 140. MC 182. C
2. TF 26. TF 37. MC 41. MC 45. MC 141. MC
3. TF 34. MC 38. MC 42. MC 46. MC 150. BE
4. TF 35. MC 39. MC 43. MC 47. MC 181. C Study Objective 2
5. TF 50. MC 60. MC 70. MC 84. MC 143. MC 163. Ex
6. TF 51. MC 61. MC 71. MC 85. MC 151. BE 164. Ex
7. TF 52. MC 62. MC 72. MC 86. MC 152. BE 183. C
8. TF 53. MC 63. MC 74. MC 87. MC 153. BE 184. C
9. TF 54. MC 64. MC 75. MC 88. MC 154. BE 185. C
10. TF 55. MC 65. MC 76. MC 89. MC 155. BE
11. TF 56. MC 66. MC 78. MC 90. MC 156. BE
12. TF 57. MC 67. MC 79. MC 91. MC 160. Ex
13. MC 58. MC 68. MC 80. MC 92. MC 161. Ex
14. MC 59. MC 69. MC 81. MC 142. MC 162. Ex Study Objective 3
15. TF 29. TF 93. MC 98. MC 103. MC 108. MC 145. MC
16. TF 73. MC 94. MC 99. MC 104. MC 109. MC 165. Ex
17. TF 77. MC 95. MC 100. MC 105. MC 110. MC 166. Ex
18. TF 82. MC 96. MC 101. MC 106. MC 111. MC 186. C
19. TF 83. MC 97. MC 102. MC 107. MC 144. MC 187. C Study Objective 4
20. TF 112. MC 115. MC 146. MC 168. Ex
21. TF 113. MC 116. MC 157. BE 169. Ex
22. TF 114. MC 117. MC 167. Ex 188. C

Test Bank for Accounting Principles, Eighth Edition 6 - 4

1. Indicate the effects of inventory errors on the financial statements. In the income statement of the current year: (a) An error in beginning inventory will have a reverse effect on net income (overstatement of inventory results in understatement of net income, and vice versa). (b) An error in ending inventory will have a similar effect on net income (overstatement of inventory results in overstatement of net income). If ending inventory errors are not corrected in the following period, their effect on net income for that period is reversed, and total net income for the two years will be correct. In the balance sheet, ending inventory errors will have the same effect on total assets and total stockholders’ equity and no effect on liabilities.

2. Compute and interpret the inventory turnover ratio. The inventory turnover ratio is calculated as cost of goods sold divided by average inventory. It can be converted to average days in inventory by dividing 365 days by the inventory turnover ratio.

a7. Apply the inventory cost flow methods to perpetual inventory records. Under FIFO and a perpetual inventory system, companies charge to cost of goods sold the cost of the earliest goods on hand prior to each sale. Under LIFO and a perpetual system, companies charge to cost of goods sold the cost of the most recent purchase prior to sale. Under the moving- average (average cost) method and a perpetual system, companies compute a new average cost after each purchase.

a8. Describe the two methods of estimating inventories. The two methods of estimating inventories are the gross profit method and the retail inventory method. Under the gross profit method, companies apply a gross profit rate to net sales to determine estimated cost of goods sold. They then subtract estimated cost of goods sold from cost of goods available for sale to determine the estimated cost of the ending inventory. Under the retail inventory method, companies compute a cost-to-retail ratio by dividing the cost of goods available for sale by the retail value of the goods available for sale. They then apply this ratio to the ending inventory at retail to determine the estimated cost of the ending inventory.

Inventories 6 - 5

TRUE-FALSE STATEMENTS

1. Transactions that affect inventories on hand have an effect on both the balance sheet and the income statement.

2. The more inventory a company has in stock, the greater the company's profit.

3. Raw materials inventories are the goods that a manufacturer has completed and are ready to be sold to customers.

4. Goods that have been purchased FOB destination but are in transit, should be excluded from a physical count of goods.

5. Goods out on consignment should be included in the inventory of the consignor.

6. The specific identification method of costing inventories tracks the actual physical flow of the goods available for sale.

7. Management may choose any inventory costing method it desires as long as the cost flow assumption chosen is consistent with the physical movement of goods in the company.

8. The first-in, first-out (FIFO) inventory method results in an ending inventory valued at the most recent cost.

9. The matching principle requires that the cost of goods sold be matched against the ending merchandise inventory in order to determine income.

10. The specific identification method of inventory valuation is desirable when a company sells a large number of low-unit cost items.

11. If a company has no beginning inventory and the unit cost of inventory items does not change during the year, the value assigned to the ending inventory will be the same under LIFO and average cost flow assumptions.

12. If the unit price of inventory is increasing during a period, a company using the LIFO inventory method will show less gross profit for the period, than if it had used the FIFO inventory method.

13. If a company has no beginning inventory and the unit price of inventory is increasing during a period, the cost of goods available for sale during the period will be the same under the LIFO and FIFO inventory methods.

14. A company may use more than one inventory costing method concurrently.

15. Use of the LIFO inventory valuation method enables a company to report paper or phantom profits.

16. If a company changes its inventory valuation method, the effect of the change on net income should be disclosed in the financial statements.

17. Under the lower-of-cost-or-market basis, market is defined as current replacement cost.

Inventories 6 - 7

Answers to True-False Statements

Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. Item Ans. 1. T 6. T 11. T 16. T 21. F 26. T 31. T 2. F 7. F 12. T 17. T a22. T 27. T a32. F 3. F 8. T 13. T 18. F a23. T 28. T a33. T 4. T 9. F 14. T 19. T a24. F 29. T 5. T 10. F 15. F 20. F a25. F 30. T

MULTIPLE CHOICE QUESTIONS

1. Inventories affect a. only the balance sheet. b. only the income statement. c. both the balance sheet and the income statement. d. neither the balance sheet nor the income statement.

2. Merchandise inventory is a. reported under the classification of Property, Plant, and Equipment on the balance sheet. b. often reported as a miscellaneous expense on the income statement. c. reported as a current asset on the balance sheet. d. generally valued at the price for which the goods can be sold.

3. Items waiting to be used in production are considered to be a. raw materials. b. work in progress. c. finished goods. d. merchandise inventory.

4. In a manufacturing business, inventory that is ready for sale is called a. raw materials inventory. b. work in process inventory. c. finished goods inventory. d. store supplies inventory.

5. The factor which determines whether or not goods should be included in a physical count of inventory is a. physical possession. b. legal title. c. management's judgment. d. whether or not the purchase price has been paid.

6. If goods in transit are shipped FOB destination a. the seller has legal title to the goods until they are delivered. b. the buyer has legal title to the goods until they are delivered. c. the transportation company has legal title to the goods while the goods are in transit. d. no one has legal title to the goods until they are delivered.

Test Bank for Accounting Principles, Eighth Edition 6 - 8

1. An auto manufacturer would classify vehicles in various stages of production as a. finished goods. b. merchandise inventory. c. raw materials. d. work in process.

2. Independent internal verification of the physical inventory process occurs when a. the employee is required to count all items twice for sake of verification. b. the items counted are compared to the inventory account balance. c. a second employee counts the inventory and compares the result to the count made by the first employee. d. all prenumbered inventory tags are accounted for.

3. An employee assigned to counting computer monitors in boxes should a. estimate the number if there is a large quantity to be counted. b. read each box and rely on the box description for the contents. c. determine that the box contains a monitor. d. rely on the warehouse records of the number of computer monitors.

4. After the physical inventory is completed, a. quantities are listed on inventory summary sheets. b. quantities are entered into various general ledger inventory accounts. c. the accuracy of the inventory summary sheets is checked by the person listing the quantities on the sheets. d. unit costs are determined by dividing the quantities on the summary sheets by the total inventory costs.

5. A recommended internal control procedure for taking physical inventories is that the counting should be done by employees who do not have custodial responsibility for the inventory. This is an example of what type of internal control procedure? a. Establishment of responsibility b. Documentation procedure c. Independent internal verification d. Segregation of duties

6. Westcoe Company's goods in transit at December 31 include:

sales made purchases made (1) FOB destination (3) FOB destination (2) FOB shipping point (4) FOB shipping point Which items should be included in Westcoe's inventory at December 31? a. (2) and (3) b. (1) and (4) c. (1) and (3) d. (2) and (4)

1. The term "FOB" denotes a. free on board. b. freight on board. c. free only (to) buyer. d. freight charge on buyer.

Test Bank for Accounting Principles, Eighth Edition 6 - 10

1. Using the LIFO inventory method, the value of the ending inventory on June 30 is a. $536. b. $653. c. $1,447. d. $1,564.

2. Using the FIFO inventory method, the amount allocated to cost of goods sold for June is a. $653. b. $1,272. c. $1,447. d. $1,564.

3. Using the average-cost method, the amount allocated to the ending inventory on June 30 is a. $2,100. b. $1,500. c. $575. d. $600.

4. The inventory method which results in the highest gross profit for June is a. the FIFO method. b. the LIFO method. c. the weighted average unit cost method. d. not determinable.

5. A company purchased inventory as follows:

200 units at $ 300 units at $ The average unit cost for inventory is a. $10. b. $11. c. $11. d. $12.

1. Which of the following items will increase inventoriable costs for the buyer of goods? a. Purchase returns and allowances granted by the seller b. Purchase discounts taken by the purchaser c. Freight charges paid by the seller d. Freight charges paid by the purchaser

2. Inventoriable costs may be thought of as a pool of costs consisting of which two elements? a. The cost of beginning inventory and the cost of ending inventory b. The cost of ending inventory and the cost of goods purchased during the year c. The cost of beginning inventory and the cost of goods purchased during the year d. The difference between the costs of goods purchased and the cost of goods sold during the year

Inventories 6 - 11

1. The cost of goods available for sale is allocated between a. beginning inventory and ending inventory. b. beginning inventory and cost of goods on hand. c. ending inventory and cost of goods sold. d. beginning inventory and cost of goods purchased.

2. Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9, car is still on hand. What is Sam’s gross profit for March? a. $5,250. b. $4,500. c. $750. d. $8,250.

3. Of the following companies, which one would not likely employ the specific identification method for inventory costing? a. Music store specializing in organ sales b. Farm implement dealership c. Antique shop d. Hardware store

4. A problem with the specific identification method is that a. inventories can be reported at actual costs. b. management can manipulate income. c. matching is not achieved. d. the lower-of-cost-or-market basis cannot be applied.

5. The selection of an appropriate inventory cost flow assumption for an individual company is made by a. the external auditors. b. the SEC. c. the internal auditors. d. management.

6. Which one of the following inventory methods is often impractical to use? a. Specific identification b. LIFO c. FIFO d. Average cost

7. Which of the following is not a common cost flow assumption used in costing inventory? a. First-in, first-out b. Middle-in, first-out c. Last-in, first-out d. Average cost

8. The accounting principle that requires that the cost flow assumption be consistent with the physical movement of goods is a. called the matching principle. b. called the consistency principle. c. nonexistent; that is, there is no accounting requirement. d. called the physical flow assumption.

Inventories 6 - 13

Use the following information for questions 74–77.

Tier II Company uses a periodic inventory system. Details for the inventory account for the month of January, 2008 are as follows:

Units Per unit price Total Balance, 1/1/08 200 $5 $1, Purchase, 1/15/08 100 5 530 Purchase, 1/28/08 100 5 550

An end of the month (1/31/08) inventory showed that 120 units were on hand.

1. How many units did the company sell during January, 2008? a. 80 b. 120 c. 200 d. 280

2. If the company uses FIFO, what is the value of the ending inventory? a. $ b. $ c. $ d. $1,

3. If the company uses LIFO, what is the value of the ending inventory? a. $ b. $ c. $ d. $1,

4. If the company uses FIFO and sells the units for $10 each, what is the gross profit for the month? a. $1, b. $1, c. $2, d. $3,

Use the following information for questions 78-83.

W. Reindeer Company's inventory records show the following data:

Units Unit Cost Inventory, January 1 5,000 $9. Purchases: June 18 4,500 8. November 8 3,000 7.

A physical inventory on December 31 shows 2,000 units on hand. W. Reindeer sells the units for $12 each. The company has an effective tax rate of 20%. Reindeer uses the periodic inventory method.

Test Bank for Accounting Principles, Eighth Edition 6 - 14

1. Under the FIFO method, the December 31 inventory is valued at a. $14,000. b. $14,500. c. $15,000. d. $18,000.

2. What is the cost of goods available for sale? a. $21, b. $36, c. $45, d. $102,

3. Under the LIFO method, cost of goods sold is a. $10,500. b. $18,000. c. $84,000. d. $88,000.

4. The weighted-average cost per unit is a. $7. b. $8. c. $8. d. $8.

5. If the company uses FIFO, what is the gross profit for the period? a. $2, b. $10, c. $21, d. $38,

6. What is the difference in taxes if LIFO rather than FIFO is used? a. $800 additional taxes b. $3,200 tax savings c. $4,000 tax savings d. $4,000 additional taxes

Use the following inventory information for questions 84–86.

July 1 Beginning Inventory 20 units at $19 $ 380 7 Purchases 70 units at $20 1, 22 Purchases 10 units at $22 220 $2,

A physical count of merchandise inventory on July 31 reveals that there are 30 units on hand.

1. Using the average-cost method, the value of ending inventory is a. $580. b. $600. c. $610. d. $620.

Test Bank for Accounting Principles, Eighth Edition 6 - 16

1. Ending inventory under FIFO is a. $438. b. $846. c. $421. d. $863.

2. Ending inventory under LIFO is a. $438. b. $421. c. $846. d. $863.

3. Assuming that the specific identification method is used and that ending inventory consists of 15 units from each of the three purchases and 5 units from the November 1 inventory, cost of goods sold is a. $427. b. $857. c. $854. d. $836.

Use the following information for questions 93–96.

Ace Industries had the following inventory transactions occur during 2008:

Units Cost/unit 2/1/08 Purchase 18 $ 3/14/08 Purchase 31 $ 5/1/08 Purchase 22 $

The company sold 51 units at $63 each and has a tax rate of 30%.

1. Assuming that a periodic inventory system is used, what is the company’s gross profit using LIFO? (rounded to whole dollars) a. $2, b. $2, c. $ d. $

2. Assuming that a periodic inventory system is used, what is the company’s after-tax income using LIFO? (rounded to whole dollars) a. $ b. $ c. $ d. $

3. Assuming that a periodic inventory system is used, what is the company’s gross profit using FIFO? (rounded to whole dollars) a. $2, b. $2, c. $ d. $

Inventories 6 - 17

1. Assuming that a periodic inventory system is used, what is the company’s after-tax income using FIFO? (rounded to whole dollars) a. $ b. $ c. $ d. $

2. Companies adopt different cost flow methods for each of the following reasons except a. balance sheet effects. b. cash flow effects. c. income statements effects. d. tax effects.

3. In periods of rising prices, the inventory method which results in the inventory value on the balance sheet that is closest to current cost is the a. FIFO method. b. LIFO method. c. average-cost method. d. tax method.

4. Two companies report the same cost of goods available for sale but each employs a different inventory costing method. If the price of goods has increased during the period, then the company using a. LIFO will have the highest ending inventory. b. FIFO will have the highest cost of good sold. c. FIFO will have the highest ending inventory. d. LIFO will have the lowest cost of goods sold.

5. If companies have identical inventoriable costs but use different inventory flow assumptions when the price of goods have not been constant, then the a. cost of goods sold of the companies will be identical. b. cost of goods available for sale of the companies will be identical. c. ending inventory of the companies will be identical. d. net income of the companies will be identical.

6. In a period of increasing prices, which inventory flow assumption will result in the lowest amount of income tax expense? a. FIFO b. LIFO c. Average Cost d. Income tax expense for the period will be the same under all assumptions.

7. The specific identification method of costing inventories is used when the a. physical flow of units cannot be determined. b. company sells large quantities of relatively low cost homogeneous items. c. company sells large quantities of relatively low cost heterogeneous items. d. company sells a limited quantity of high-unit cost items.

Inventories 6 - 19

1. The manager of Wyatt Company is given a bonus based on income before income taxes. Net income, after taxes, is $5,600 for FIFO and $5,040 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager's bonus if FIFO is adopted instead of LIFO? a. $ b. $ c. $ d. $

2. The consistent application of an inventory costing method is essential for a. conservatism. b. accuracy. c. comparability. d. efficiency.

3. Which costing method cannot be used to determine the cost of inventory items before lower-of-cost-or-market is applied? a. Specific identification b. FIFO c. LIFO d. All of these methods can be used.

4. Inventory is reported in the financial statements at a. cost. b. market. c. the higher-of-cost-or-market. d. the lower-of-cost-or-market.

5. The lower-of-cost-or-market basis of valuing inventories is an example of a. comparability. b. the cost principle. c. conservatism. d. consistency.

6. Under the lower-of-cost-or-market basis in valuing inventory, market is defined as a. current replacment cost. b. selling price. c. historical cost plus 10%. d. selling price less markup.

7. The lower-of-cost-or-market (LCM) basis may be be used with all of the following methods except a. average cost. b. FIFO. c. LIFO. d. The LCM basis may be used with all of these.

Test Bank for Accounting Principles, Eighth Edition 6 - 20

1. Isaac Company developed the following information about its inventories in applying the lower-of-cost-or-market (LCM) basis in valuing inventories:

Product Cost Market A $110,000 $120, B 80,000 76, C 160,000 162,

If Isaac applies the LCM basis, the value of the inventory reported on the balance sheet would be a. $350,000. b. $342,000. c. $346,000. d. $362,000.

1. Understating beginning inventory will understate a. assets. b. cost of goods sold. c. net income. d. owner's equity.

2. An error in the physical count of goods on hand at the end of a period resulted in a $10,000 overstatement of the ending inventory. The effect of this error in the current period is Cost of Goods Sold Net Income a. Understated Understated b. Overstated Overstated c. Understated Overstated d. Overstated Understated

3. If beginning inventory is understated by $10,000, the effect of this error in the current period is Cost of Goods Sold Net Income a. Understated Understated b. Overstated Overstated c. Understated Overstated d. Overstated Understated

4. A company uses the periodic inventory method and the beginning inventory is overstated by $4,000 because the ending inventory in the previous period was overstated by $4,000. The amounts reflected in the current end of the period balance sheet are Assets Owner’s Equity a. Overstated Overstated b. Correct Correct c. Understated Understated d. Overstated Correct

5. Overstating ending inventory will overstate all of the following except a. assets. b. cost of goods sold. c. net income. d. owner's equity.

Which of the following should be included in the physical inventory count of a company?

Which of the internal control procedures most likely addresses the completeness assertion for inventory?

Which of the following is not an inherent risk factor in the audit of the inventory management process?