Which of the Following Is an Example of a Substantive

question 1

Multiple Choice

Which of the following is an example of a substantive test that could be used for the audit of the accuracy of sales prices?

• A)inspect sales price master authorization forms for the presence of an approval signature
• B)observe that the point-of-sale system automatically pulls sales prices from the master file
• C)inquire about the process that is used to update sales prices in the sales price master file
• D)calculate the gross margin for each product that is sold by the company

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Definitions:

Growth

A key objective for businesses and economies, referring to an increase in capacity, value, or size, often measured by metrics such as GDP for economies and sales revenues for businesses.

Accounts Payable

Money owed by a company to its creditors for goods or services that have been delivered but not yet paid for.

Inventory

Refers to the goods and materials a business holds for the ultimate goal of resale.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor costs.