In the Context of Assertions About Classes of Transactions and Events

question 106

Multiple Choice

In the context of assertions about classes of transactions and events for the period under audit, auditors considering occurrence gather evidence to verify that _______.

• A)a recorded transaction or event, such as a revenue or an expense item, actually took place and relates to the entity
• B)all transactions have been recorded and the financial statements are not understated or overstated because transactions have been omitted
• C)transactions and events have been recorded at appropriate amounts
• D)transactions and events have been recorded in the proper accounts

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Definitions:

Property Taxes

Taxes paid by property owners based on the assessed value of their real estate, typically levied by local governments.

Oversized

Describes an item, position, or trade that is larger than the normal or usual size; often used in finance to refer to large positions.

Production Equipment

Tools and machinery used in the manufacturing process to produce goods and services.

Net Working Capital

A measure of a company's short-term financial health, calculated as current assets minus current liabilities.