The Purpose of an Audit Is to

question 125

Multiple Choice

The purpose of an audit is to

• A) determine whether or not a company is a good investment
• B) render an opinion on the fairness of the statements
• C) determine whether or not a company complies with corporate social responsibility
• D) determine whether or not a company is a good credit risk

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Definitions:

Long-term Investments

Investments made to be held for more than a single fiscal year, which might include bonds, stocks, or real estate.

Stock of Other Companies

Securities representing partial ownership in other companies that can be held as investments by individuals or entities.

Cash Accounts

Cash accounts are financial accounts that keep track of cash transactions within an organization, including receipts, disbursements, and balances.

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate revenues and expenses to the period in which they actually occurred.