11) State the six functions that make up the inventory and warehousing cycle and for each function identify the related documents and/or records that would be used by a manufacturing company. 12) In process cost systems costs are accumulated by individual jobs. A) True B) False 13) In job cost systems costs are accumulated by individual jobs. A) True B) False 14) While separate perpetual inventory records are normally kept for raw materials and finished goods most companies do not use perpetual records for work-in-process. A) True B) False Learning Objective 21-2 1) The audit tests to verify that the client is using an inventory method which is generally accepted and to verify that physical counts were correctly summarized are performed during the audit of the: A) acquisition and payments cycle. B) payroll and personnel cycle. C) inventory and warehousing cycle. D) sales and collection cycle. 2) Handling the receipt of ordered goods is a part of the ________ cycle. A) purchasing B) acquisition and payment C) inventory D) inventory and warehousing 3) Which of the following is not a function within the inventory and warehousing cycle? A) Process the goods B) Store raw materials C) Ship finished goods D) Process invoices for shipped goods 4) The audit of the inventory and warehousing cycle will be affected by the results from other business processes. Identify the “other” business cycles and how they impact the audit of inventory. 5) The audit of the inventory and warehousing cycle consists of five parts. State the five parts and for each part identify the cycle in which that part is tested by the auditor. 6) Inventory compilation tests are used to verify that the inventory is recorded at the lower of cost or market. A) True B) False
