An auditor who uses a transaction cycle approach to assessing control risk most likely would test control activities related to transactions involving the sale of goods to customers with the:
A. Sale of long-term debt.
B. Collection of receivables.
C. Purchase of merchandise inventory.
D. Payment of accounts payable.
Answer: B
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What is the name of the formalized commitment of the IASB and the FASB to converge U.S. and international accounting standards?
a. The Sarbanes-Oxley Act b. The Norwalk Agreement c. The IFRS Foundation d. The Conceptual Framework
Trend analysis refers to the identification of characteristics of transactions that are most likely to be fraudulent.
Answer the following statement true (T) or false (F)
The main source of the information needed to prepare the balance sheet is
a. the Account Title column of the work sheet; b. the statement of owner's equity; c. the Balance Sheet columns of the work sheet; d. the Income Statement accounts; e. the trial balance
The formula used to calculate the number of units needed in order to earn a desired profit is
A) (Fixed costs + Variable costs)/Sales B) (Fixed costs + Desired profit)/Sales C) (Fixed costs + Desired profit)/Contribution margin per unit D) (Fixed costs + Variable costs)/Contribution margin per unit E) (Fixed costs + Desired profit)/Contribution margin ratio