When Auditing Expense Accounts,which of the Following Would the Auditor

question 39

Multiple Choice

When auditing expense accounts,which of the following would the auditor be least likely to subject to a detailed test of transactions?

• A)Legal expense.
• B)Utilities expense.
• C)Repairs and maintenance expense.
• D)Travel expense.

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Definitions:

Manufacturing Margin

Similar to contribution margin but specifically related to manufacturing, it evaluates the difference between manufacturing costs and the sales price of goods.

Contribution Margin

The amount by which a product's selling price exceeds its total variable costs, indicating the contribution towards covering fixed costs.

Operating Income

Earnings from a company's primary business activities, excluding costs and expenses, interest, and taxes.

Absorption Costing

An approach to accounting that integrates all costs associated with manufacturing - including direct materials, direct labor, and overhead costs, no matter if they are variable or fixed, into the final cost of a product.