The Overall Objective of the Audit of the Sales and Collection

question 105

Multiple Choice

The overall objective of the audit of the sales and collection cycle is to evaluate whether:

• A) the account balances affected by the cycle are fairly presented in accordance with Australian accounting standards.
• B) the sales account and the accounts receivable account are presented fairly in accordance with generally accepted accounting principles.
• C) the sales account and the accounts receivable account are free of material errors.
• D) the sales account and the accounts receivable account are free of errors.

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Definitions:

Non Sequitur

A statement that does not logically follow from the previous argument or statement.

Incentive Theory

A motivational theory suggesting that behavior is driven by a desire for external rewards and incentives.

Drive Theory

A theory that suggests motivation is based on the desire to reduce internal tension caused by unmet biological needs.

Homeostatic

Relating to or denoting the self-regulating process by which biological systems tend to maintain stability while adjusting to conditions that are optimal for survival.