Test results of which other cycle/s, in addition to the test results of inventory and warehousing, will affect the tests of details of balances for inventory?
A) The acquisitions and payments cycle
B) The sales and collection cycle
C) The payroll and personnel cycle
D) All three of the above

Question

Quizplus · Accepted Answer

The acquisitions and payments cycle, the sales and collection cycle, and the payroll and personnel cycle all affect the tests of details of balances for inventory because they all involve transactions that can affect the inventory balance. For example, the acquisitions and payments cycle includes transactions that increase the inventory balance, such as purchases of inventory, and transactions that decrease the inventory balance, such as returns of inventory. The sales and collection cycle includes transactions that decrease the inventory balance, such as sales of inventory. The payroll and personnel cycle includes transactions that can affect the inventory balance, such as the use of inventory as compensation for employees.

Test Results of Which Other Cycle/s, in Addition to the Test