Which of the Following Is Not True Regarding the Testing

question 27

Multiple Choice

Which of the following is not true regarding the testing of transactions in the stockholders' equity accounts?

• A)The transactions are typically tested on a 100% basis.
• B)The transactions are typically tested on a sampling basis.
• C)The number of transactions is typically small.
• D)Most of these transactions are highly material.

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Definitions:

Deposit In Transit

Funds that have been deposited by a company but not yet credited to its bank account.

Ledger

A comprehensive collection of a company's financial accounts.

Petty Cash Fund

A small amount of cash kept on hand by a business for making immediate payments for miscellaneous small expenses.

Journal Entries

The basic means of recording financial transactions in the accounting records, consisting of debits and credits to various accounts.