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When we are carrying on test of controls for inventory, we can select a sample of inventory lines to count at the year-end inventory count. What’s the meaning in details in bold. May I have a specific example or situation. Thanks.
It simply means taking a sample from the complete inventory.
So if I was a clothes manufacture my inventory lines could be
Red Shirts
Blue Shirts
Green Shirts
Orange Shorts
Purple SocksThe auditor could then select the Red Shirt and Purple socks inventory lines to recount or be present at the year end count.
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