When labour is a significant part of inventory, verifying the proper accounting of these costs should be tested in the:
A) payroll and personnel cycle.
B) inventory and warehousing cycle.
C) cash cycle.
D) acquisitions and payments cycle.

Question

Quizplus · Accepted Answer

Labour costs, especially when they are a significant part of inventory, are typically verified in the payroll and personnel cycle. This is because the payroll and personnel cycle includes the processing of employee time and the payment of wages, which are directly related to labor costs included in inventory.

When Labour Is a Significant Part of Inventory, Verifying the Proper