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

Question

Quizplus · Accepted Answer

The human resources and payroll cycle is where labour costs are recorded, and this cycle includes verifying the proper accounting of these costs. Therefore, option B is the best choice. The inventory and distribution cycle deals with the movement of inventory, while the acquisitions and payments cycle deals with the acquisition of goods and services and payment for them. The cash cycle deals with cash receipts and disbursements, which are not directly related to labour costs.

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