Among Analytical Procedures Commonly Used to Audit the Revenue Cycle

question 66

Multiple Choice

Among analytical procedures commonly used to audit the revenue cycle, what is the audit significance of the sales to capacity ratio?

• A)Assessing the reasonableness of total revenues
• B)Comparing manufacturing to other asset-based companies
• C)Evaluating the reasonableness of uncollectible accounts expense
• D)Evaluating the reasonableness of prior period's uncollectible accounts expense

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Definitions:

Dissolution

The first stage in the termination of a partnership.

Liquidation

The process in which a debtor turns over all assets to a trustee.

Death Of Corporation

The termination of a corporation's legal existence, either by voluntary dissolution or through legal action.

Rehabilitation

The process of restoring someone to health or normal life through training and therapy after imprisonment, addiction, or illness.