Which of the Following Statements Is Correct Regarding the Audit

question 19

Multiple Choice

Which of the following statements is correct regarding the audit of inventory cost accounting?

• A) Cost accounting systems and controls are the same for all manufacturing companies.
• B) All companies that have work-in-process must use a perpetual inventory system.
• C) Auditors test perpetual inventory master files by examining documentation that supports additions and reductions of inventory amounts in the master files.
• D) Manufacturing companies keep their cost accounting records separate from the production and other accounting records.

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Definitions:

Arbitration

A form of alternative dispute resolution where a neutral third party makes a decision to resolve a dispute outside of court.

Hybrid Dispute

This refers to conflicts that mix elements of both legal and non-legal disputes, often found in settings where contractual and relational issues intersect.

Mediation

A method of dispute resolution where a neutral third party assists two conflicting sides to reach a mutually agreed-upon solution.

Strike Decline

The decreasing frequency or likelihood of strikes, where workers collectively refuse to work as a form of protest, often due to changing labor laws, union strategies, or economic conditions.