Which of the Following Is Not a Way in Which

question 54

Multiple Choice

Which of the following is not a way in which auditors use the concept of overall materiality?

• A)As a guide to planning the audit plan.
• B)As a guide to the evaluation of evidence.
• C)As a guide for making decisions about the audit report.
• D)As a guide for assessing control risk.

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Definitions:

Purchase Account

An account used in accounting to record the total purchases of goods and services by a company.

Inventory Account

An account used to record the value of inventory held by a company, including raw materials, work-in-progress, and finished goods.

Cost of Goods Available

The total cost of goods a company has to sell during a specific period, calculated by adding the beginning inventory to the cost of goods purchased.

Purchase Returns

Refers to the process of returning goods previously bought to the supplier due to various reasons like defects or dissatisfaction.