The costs used to value the physical inventory must be tested to determine whether the client has correctly followed an inventory method that is in accordance with accounting standards and is consistent with previous years. The audit procedures used to verify these costs are referred to as:
A) price tests.
B) consistency tests.
C) cost tests.
D) compilation tests.

Question

Quizplus · Accepted Answer

Price tests are audit procedures used to verify the costs used to value physical inventory, ensuring they are in accordance with accounting standards and consistent with previous years.

The Costs Used to Value the Physical Inventory Must Be