Which of the Following Statements Is NOT True About the Cycle

question 79

Multiple Choice

Which of the following statements is NOT true about the cycle approach to segmenting an audit?

• A) All general ledger accounts and journals are included at least once.
• B) The 'inventory and warehousing' cycle may be audited at any time during the engagement since it is unrelated to the other cycles.
• C) The 'capital acquisition and repayment' cycle is closely related to the 'acquisition of goods and services and payment' cycle.
• D) Some journals and general ledger accounts are included in more than one cycle.

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Definitions:

Fair Values

the estimated market value of an asset or liability, based on current prices in an open and competitive market.

Temporary Investments

Investments in stocks, bonds, or other securities that a company intends to sell within a short period, typically one year.

Excess Cash

The amount of cash a company possesses that exceeds the minimum level needed to maintain its operations and investment plans.

Brokers' Commissions

Fees paid to brokers for their role in facilitating transactions, such as buying or selling securities, real estate, or insurance products.