Which of the following describes the 'completeness' assertion for inventory?

Answer options:

Inventory recorded in the books actually exists.

Inventory is properly valued at lower of cost or market.

All inventory on hand and in transit (FOB shipping point) is recorded.

The entity has legal title to the inventory.

How to approach this question

Completeness = No omissions. Everything owned is recorded.

Full Answer

C.All inventory on hand and in transit (FOB shipping point) is recorded.✓ Correct

The completeness assertion ensures that all assets (inventory) that should be recorded have been recorded. This includes goods in the warehouse and goods owned but in transit (FOB shipping point).

Common mistakes

Confusing Completeness with Existence.

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