Which of the following methods for determining inventory cost is not allowed by GAAP?
Production cycle

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Hard
Bean K
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10 questions
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1.
MULTIPLE CHOICE QUESTION
45 sec • 1 pt
Average cost
FIFO
LIFO
Standard cost
2.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Which cycle is not directly linked to the production cycle?
Acquisition and expenditure cycle
Payroll cycle
Revenue and collection cycle
Finance and investment cycle
3.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
To determine the client’s planned amount and timing of production of a product, the auditor reviews the
Sales forecast
Inventory reports
Production plan
Purchases journal
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
An auditor reviews job cost sheets to test which transaction assertion?
Occurrence
Completeness
Accuracy
Classification
5.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Which of the following is an internal control weakness for a company whose inventory of supplies consists of a large number of individual items?
Supplies of relatively little value are expensed when purchased.
The cycle basis is used for physical inventory counts
The warehouse manager is responsible for maintenance of perpetual inventory records
Perpetual inventory records are maintained only for items of significant value
6.
MULTIPLE CHOICE QUESTION
45 sec • 1 pt
To make a year-to-year comparison of inventory turnover most meaningful, the auditor performs the analysis
For the company as a whole
By division
By product
All of the above.
7.
MULTIPLE CHOICE QUESTION
1 min • 1 pt
Which of the following procedures would best prevent or detect the theft of valuable items from an inventory that consists of hundreds of different items selling for $1 to $10 and a few items selling for hundreds of dollars?
Maintain a perpetual inventory of only the more valuable items with frequent periodic verification of the accuracy of the perpetual inventory record.
Have an independent accounting firm prepare an internal control report on the effectiveness of the controls over inventory.
Have separate warehouse space for the more valuable items with frequent periodic physical inventory counts and comparison to perpetual inventory records.
Require a manager’s signature for the removal of any inventory item with a value of more than $50.
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