The Sampling Unit in a Test of Controls Pertaining to the Existence

question 59

Multiple Choice

The sampling unit in a test of controls pertaining to the existence of payroll transactions ordinarily is a (an) :

• A) Clock card or time ticket.
• B) Employee Form W-2.
• C) Employee personnel record.
• D) Payroll register entry.

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Definitions:

Incremental Cash Flow

The additional cash flow a company receives from undertaking a new project, considering the revenue and costs involved.

Capital Budgeting

The process used by companies to evaluate major investments or expenditures on capital assets, involving the assessment of investment's expected cash flows and profitability.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Financing Costs

These are the expenses incurred by a company or an individual when acquiring funds to finance an investment or project, including interest payments, fees, and other charges.