The AICPA's Practice Alert No

Multiple Choice

The AICPA's Practice Alert No. 94-2: Auditing Inventories-Physical Observations describes several circumstances that constitute inventory fraud. Which of the following is not an example of inventory fraud?

A) including items in inventory when the corresponding payable has not been recorded
B) adjusting inventory to lower-of-cost-or-market
C) increasing counts for items that auditors did not test count
D) counting obsolete inventory as salable or usable