The Auditor Must Verify Whether the Physical Counts Were Correctly

question 72

Multiple Choice

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

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

---

Definitions:

Common-size Statements

Financial statements that display line items as a percentage of a common base figure, facilitating comparisons across time periods or companies.

Comparative Financial Statement

Comparative financial statements present the financial position and results of operations for a business across multiple periods, allowing for analysis of trends and financial performance over time.

Base Period

A specific time period against which conditions in other time periods are compared, often used in index numbers or to measure economic growth.

Estimated Period

A time frame within which certain financial projections or the useful life of an asset is expected to occur.