Accounting Multiple Choice Question – 30 August 2026

Lucy, an audit junior, has carried out the following tests to verify the valuation of inventory in the financial statements of Alex Manufacturing Ltd.

For the case described below: select whether the test proves the assertion of valuation, does not prove the assertion of valuation, it depends on the type of company, or needs to be referred to a senior colleague.

• Attending the inventory count and carrying out sample counts on several items

Select ONE answer:

1. It depends on the type of company
2. Needs to be referred to a senior colleague
3. Does not prove valuation
4. Proves valuation

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – The first statement represents a test of control over inventory counting procedures and therefore, the completeness or existence of the quantity of inventory. It is not a test of valuation.
4. Not correct

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