Final answer:
The correct answer is d. Existence or occurrence. Management assertions are statements made by management regarding different aspects of financial statements. There are five main management assertions: completeness, existence or occurrence, valuation or allocation, rights and obligations, and presentation and disclosure.
Step-by-step explanation:
The correct answer is d. Existence or occurrence.
Management assertions are statements made by management regarding different aspects of financial statements. They help ensure that the financial statements are reliable and accurate. There are five main management assertions: completeness, existence or occurrence, valuation or allocation, rights and obligations, and presentation and disclosure. The assertion of existence or occurrence is related to the fact that the inventory items physically exist and the transactions related to inventory actually occurred.
Completeness ensures that all inventory transactions have been recorded and that no items have been omitted. Rights and obligations refer to the legal ownership and control over the inventory. Reporting focuses on the proper classification and disclosure of inventory in the financial statements. The assertion of existence or occurrence specifically relates to the physical existence of inventory items and the verification of transactions.