The following questions deal with tests of details of balances and analytical procedures for inventory. Choose the best response.

a. An auditor would most likely learn of slow-moving inventory through

(1) inquiry of store personnel.

(2) inquiry of sales personnel.

(3) physical observation of inventory.

(4) review of perpetual inventory data files.

b. An inventory turnover analysis is useful to the auditor because it may detect

(1) inadequacies in inventory pricing.

(2) the optimum automatic re-order points.

(3) the existence of obsolete merchandise.

(4) methods of avoiding cyclical holding costs.

c. A public accountant examining inventory may appropriately apply attribute sampling in order to estimate the

(1) dollar value of inventory.

(2) average price of inventory items.

(3) physical quantity of inventory items.

(4) percentage of slow-moving inventory items.