Tests of Details of Income Statement Account Are Likely When

question 29

Multiple Choice

Tests of details of income statement account are likely when?

• A) inherent risk is less than high.
• B) control risk is moderate to low.
• C) analytical procedures indicate no unusual fluctuations.
• D) the account requires analysis
• E)g. directors' remuneration, income tax

---

Definitions:

Winding Up Stage

The process of concluding the affairs of a business or partnership, leading to its dissolution.

Dissolution

The formal disbanding of a partnership, corporation, or other business entity. For instance, partnerships can be dissolved by acts of the partners, by operation of law, or by judicial decree.

Partnership Assets

Resources or items of value owned by a partnership that are used in the operation of the business and subject to division among partners according to their agreement.

Voluntary Dissociation

The act of a member choosing to leave a partnership or business entity according to the agreement terms or state law.