Question

T/F

11. Performing an analytical procedure, such as considering the inventory turnover ratio, would be useful in determining whatever inventory is obsolete.

T/F

12. Analytical procedure should be performed in an engagement to compile historical financial statement

13. Which of he following are factors to consider in determining “nexus,” an discussed?

a. sales

b. property

c. wage

d. All the above

e. non of the above

14. The accounts receivable accounting department should be under the direction of the;

a. treasure

b. controller

c. credit manager

d. none of the above

15. A problem with a company’s December 31, 2018 ending inventory will affect the annual financial statements for which year.

a. 2018 only

b.2019 0nly

c. both 2018 and 2019

d. neither 2018 nor 2019

Answer 1

11.True - Performing an analytical procedure, such as considering the inventory turnover ratio, would be useful in determining whatever inventory is obsolete

12. False - As analytical procedure is performed to corelate different factors of business with the financial statement not to compile  compile historical financial statement

13. d. All the above

14. b. controller

Reason - As AR is the part of controllership team as per industry standards

15. c. both 2018 and 2019

Reason:- closing inventory for 2018 will result in higher net income in 2018 and lower Net income in 2019 as compare to the income statement without the error.