Which One of the Following Statements Is NOT Correct

question 85

Multiple Choice

Which one of the following statements is NOT correct?

• A) When controls are not considered effective, or when control deviations are discovered, substantive tests will be eliminated.
• B) Tests of transactions are often performed several months prior to the balance sheet date.
• C) Tests of details of balances are normally the last tests performed.
• D) It is common to use analytical procedures at any time during the audit.

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Definitions:

Costing Approach

A costing approach is a method or technique used to determine the cost of a product or service, which can include different methodologies like absorption costing or activity-based costing.

Finished Goods Inventory

Represents the stock of completed products that are ready to be sold but have not yet been sold to customers.

Contribution Margin Ratio

The percentage of each sales dollar remaining after variable costs have been subtracted, indicating how much contributes to covering fixed costs and generating profit.

Fixed Costs

Costs that do not vary with the level of production or sales, including rent, salaries, and insurance premiums.