Which of the Following Terms Describes Procedures Designed to Detect

question 88

Multiple Choice

Which of the following terms describes procedures designed to detect material misstatements in accounts ?

• A) Substantive procedures.
• B) Control Tests
• C) Risk assessment procedures
• D) Business risk procedures.

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Definitions:

Accounts Receivable

Outstanding payments from customers to a company for products or services already rendered.

Operating Activity

Refers to the primary revenue-generating activities of an organization, such as sales and service provision.

Direct Method

A cash flow statement reporting approach that lists major operating cash receipts and payments, used to show actual cash flows.

Cash Payments

Cash Payments are transactions where monetary value is transferred from one party to another in the form of cash or its equivalent to settle a debt or purchase a good or service.