Which of the Following Audit Tests Pertains to the Accuracy

question 58

Multiple Choice

Which of the following audit tests pertains to the accuracy assertion?

• A)prepare proof of cash
• B)test a cutoff bank statement
• C)examine minutes and loan agreements
• D)read the notes to the financial statements

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Definitions:

Average Propensity

Average Propensity refers to the average tendency of individuals or entities, such as the average propensity to consume or save, measured over a specific period or income level.

Disposable Income

The available cash reserves for households to spend and save once taxes on income have been settled.

Consumption

The use of goods and services by households; an economic activity that represents spending by consumers.

Average Propensity

The ratio of total consumption to total income, indicating the average tendency of consumers to spend their income.