When an Auditor Tests an Entity's Cost Accounting System, the Auditor's

question 66

Multiple Choice

When an auditor tests an entity's cost accounting system, the auditor's tests are primarily designed to determine that:

• A)quantities on hand have been computed based on acceptable cost accounting techniques that reasonably approximate actual quantities on hand.
• B)physical inventories are in substantial agreement with book inventories.
• C)the system is in accordance with generally accepted accounting principles and is functioning as planned.
• D)costs have been properly assigned to work in process, finished goods, and cost of goods sold.

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