Which of the following is the most appropriate test for auditing inventory in the land development and home building industry?
A) Examine subsequent invoices received in support of estimates of the cost of sales for individual units sold just before year end.
B) Calculate estimated ending inventory using standards and variance information.
C) Review sales contracts for bill-and-hold transactions.
D) All of the above tests are common in the land development and home building industry.

Question

Quizplus · Accepted Answer

Examining subsequent invoices received in support of estimates of the cost of sales for individual units sold just before year end is a common and appropriate test for auditing inventory in the land development and home building industry, as it helps verify the accuracy of cost estimates and the timing of sales recognition.

Which of the Following Is the Most Appropriate Test for Auditing