Answer the following statements true (T) or false (F)
1. If an auditor selects a sample of customer accounts receivable and traces payment credits
to remittance worksheets and bank deposits, the auditor is testing the control objective of
completeness.
2. Selecting a sample of recorded sales invoices from the sales journal and comparing the quantity billed to the quantity shipped is an example of a test to satisfy the control
objective of accuracy.
3. Substantive procedures are designed to obtain direct evidence about the dollar amounts in account balances.
4. The findings of risk assessments are the basis for the selection of appropriate substantive tests and procedures.
5. In the analysis of financial statements, a continuity schedule is a working paper that
shows the movements in the account balances and the other financial statements
amounts that should tie with them.
1. FALSE
2. TRUE
3. TRUE
4. TRUE
5. TRUE
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Companies can expand seeking new country markets for already identified market segments
Indicate whether the statement is true or false
The following costs relate to Tower Company: Variable manufacturing cost, $30; variable selling and administrative cost, $8; applied fixed manufacturing overhead, $15; and allocated fixed selling and administrative cost, $4. If Tower uses absorption manufacturing-cost pricing formulas, the company's markup percentage would be computed on the basis of:
A. $30. B. $57. C. $38. D. $45. E. None of the answers is correct.
Agro Co-op, Inc., and Bio Feed Corporation are exporting firms that join together to export a line of products. Agro Co-op and Bio Feed apply to Charter Bank for a loan to fund their effort. Under federal law, Charter and other U.S. banks are
A. encouraged by credit guaranties to lend such funds. B. discouraged by administrative rules to make such loans. C. asked by enforcement agencies to report such requests. D. banned by statute from opening such credit lines.
When using the bond yield plus risk premium approach to estimating the cost of equity, the equity risk premium is usually about:
A) 3-5%. B) 8-10%. C) 20-25%. D) 10-15%. E) 30-33%.