To Test for Recorded Sales for Which There Were No

question 38

Multiple Choice

To test for recorded sales for which there were no actual shipments, the auditor traces from the:

• A) sales journal to the bill of lading.
• B) sales journal to the accounts receivable subsidiary ledger.
• C) bill of lading to the supporting customer order and sales order.
• D) bill of lading to the sales journal.

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Definitions:

Hindsight Bias

The tendency to believe, after learning an outcome, that one would have foreseen it.

Availability Heuristic

A cognitive bias that causes people to overestimate the likelihood of events based on their ability to recall examples more easily.

Confirmation Bias

The habit of looking for, comprehending, selecting, and reminiscing about information that validates an individual's prior convictions or theories.

Hindsight Bias

The tendency to believe, after learning an outcome, that one would have foreseen it, also known as the "knew-it-all-along" effect.