CAF-1 · Chapter 9 · Question 3 of 15
When verifying the carrying amount of inventory by checking the costs and recalculating using the FIFO formula, what type of verification is being performed?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Indirect verification.
Explanation
Indirect verification means checking the inputs to a model or formula (like cost inputs) and recalculating the outputs using the same methodology (like FIFO), whereas direct verification is physical counting.
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