The Auditor Must Verify Whether the Physical Counts Were Correctly

question 127

Multiple Choice

The auditor must verify whether the physical counts were correctly summarised, the inventory quantities and prices were correctly extended and the extended inventory was correctly footed. These tests are called:

• A) compilation tests.
• B) price tests.
• C) cost tests.
• D) mechanical tests.

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Definitions:

Basic Earnings per Share

A measure of a company's profitability, calculated by dividing net income by the number of outstanding common shares.

Industry Averages

Statistical measures that represent the typical value or norm within a particular industry, used for benchmarking and comparative analysis.

Horizontal Analysis

Horizontal analysis, also known as trend analysis, is a financial analysis technique that compares historical financial data over a series of periods to identify trends, increases, or decreases in financial performance.