Which it totally is! That is why all the functions I test are in pairs suitable for nose or py.test

    def test_foo():
        assert False, "test code for foo"

    def foo(farb):
        pass

Tests should absolutely be next to the code. The test should make it into the documentation. Code is documentation and should make it into the generated documentation, not the first thing you see but it should be there along with commit history, etc.