The Overall Objective in the Audit of the Sales and Collection

question 114

Multiple Choice

The overall objective in the audit of the sales and collection cycle is to evaluate whether

• A)the sales account and the accounts receivable account are free of errors.
• B)the sales account and the accounts receivable account are free of material errors.
• C)the sales account and the accounts receivable account are presented fairly in accordance with an applicable financial reporting framework.
• D)the account balances affected by the cycle are fairly presented in accordance with an applicable financial reporting framework.

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Definitions:

Journalizing

The process of recording a transaction entry into the journal.

Business Transactions

Financial activities or exchanges involving the transfer of value between entities or parties, affecting the financial position of a business.

Journal

A listing of business transactions in chronological order. The journal links on one page the debit and credit parts of transactions. Alternatively known as general journal.

Posting

The transferring, copying, or recording of information from a journal to a ledger.