When Designing Audit Procedures, the Direction of Tests Is a Crucial

question 87

Multiple Choice

When designing audit procedures, the direction of tests is a crucial step in satisfying the:

• A) classification objective.
• B) valuation objective.
• C) cutoff objective.
• D) completeness objective.

---

Definitions:

Placed on Account

Transactions recorded on credit, affecting accounts payable or receivable without immediate cash exchange.

Debit Balance

A condition where the sum of debits in an account exceeds the sum of credits, indicating an expenditure or asset.

Credit Balance

A situation where the total credits in an account exceed the total debits, often reflecting a positive balance in financial accounts.

Notes Payable

Notes payable are written agreements where a borrower agrees to pay back a specified amount of money, plus interest, to a lender at a future date.