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:

Retina

The light-sensitive layer of tissue at the back of the inner eye that converts light images into neural signals sent to the brain.

Optic Disk

Area of the retina where the optic nerve exits the retina; lacks photoreceptors and so causes a blind spot.

Optic Pit

A small depression in the optic disc where nerve fibers exit the eye, contributing to the blind spot.

Sensory Stimulus

A detectable change in the internal or external environment that elicits a response from the sensory system.