In Order to Test Programmed Application Controls in the Revenue

question 50

Multiple Choice

In order to test programmed application controls in the revenue cycle and determine whether expected results appear on exception reports, an auditor might submit a/an _________ (choose two options) .

• A)missing customer code
• B)order that exceeds a customer's credit limit
• C)valid product code
• D)invoice quantity matching quantity on shipping documents

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Definitions:

Resale Value

The estimated market value of an asset at the future date when it is likely to be sold, often used in reference to vehicles and property.

Present Value

The current value of a future sum of money or stream of cash flows, given a specified rate of return.

Tax Shields

The reduction in income taxes that results from taking allowable deductions such as depreciation, mortgage interest, and other allowances.

Leasing

An arrangement where one party, the lessor, grants another party, the lessee, the right to use an asset for a specific period in exchange for regular payments.