The Test of Details for Cash Balances Procedure That Requires

question 53

Multiple Choice

The test of details for cash balances procedure that requires the auditor to trace the unadjusted book balance on the reconciliation to the general ledger is an attempt to satisfy the audit objective of

• A)detail tie-in.
• B)existence.
• C)completeness.
• D)accuracy.

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Definitions:

Insurance Premiums

Payments made regularly to an insurance company in exchange for coverage, ensuring financial protection against specified risks.

Administrative Costs

Expenses that are not directly tied to specific business operations, including office expenses, salaries of non-production employees, and legal fees.

Earthquake Insurance

Insurance coverage specifically designed to protect a property owner against damages resulting from an earthquake.

Risk Aversion

A preference for certainty over uncertainty, with individuals choosing investments that offer a lower potential return with known risks over riskier ones.