Tolerable Deviation Rate Is the Maximum Rate of Deviation from a Prescribed

question 45

True/False

Tolerable deviation rate is the maximum rate of deviation from a prescribed control that an auditor is willing to accept and still use the planned assessed level control risk.

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Definitions:

F.O.B. Destination

A shipping term indicating that the seller bears the freight charges and retains ownership of the goods being shipped until they reach the buyer's location.

F.O.B. Shipping Point

Purchaser pays or is responsible for the shipping costs from seller’s shipping point to purchaser’s location.

Discount Period

The established period after a sale during which a customer can pay the invoice at a reduced rate, incentivizing quicker payments and enhancing cash flow.

Merchandise Inventory

Goods that a company holds with the intent of selling them to customers.