Tests of Details of Transactions for Payables Balances Include

question 38

Multiple Choice

Tests of details of transactions for payables balances include:

• A) vouching recorded payables to supporting documentation.
• B) confirming payables with major suppliers by reviewing the accounts payable ledger or accounts payable master file.
• C) comparing financial statement presentation with applicable regulations and accounting standards.
• D) verifying directors' and executive officers' remuneration.

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Definitions:

Marginal Revenue

The additional income that a company generates from selling one more unit of a good or service.

Average Variable Cost

The per-unit variable cost of production, calculated by dividing total variable costs by the quantity of output produced.

Long-Run Scale

Refers to the time period in which all factors of production and costs are variable, allowing companies to adjust all inputs in response to market conditions.

Short-Run

A period in which at least one input is fixed, limiting the firm's capacity to adjust to changes in demand or market conditions.