Write the word TRUE if the following statement is true, otherwise FALSE.

1 The best audit procedure for the discovery of damaged merchandise in a client's ending inventory is to observe

merchandise and raw materials during the client's physical count.

2 When verifying debits to the perpetual inventory records of a non-manufacturing company, an auditor would be

most interested in examining a sample of purchase invoices.

3 The primary objective of a CPA's observation of a client's physical inventory is to obtain direct knowledge that

the inventory exists and has been properly counted.

4 A CPA examining inventory may approriately apply sampling for attributes in order to estimate the percentage

of slow-moving inventory items.

5 An auditor counting the client inventory is an audit procedure related to inventory audit to assert its existence.