Which One of the Following Statements Regarding the Five Types

question 72

Multiple Choice

Which one of the following statements regarding the five types of audit tests in the sales and collection cycle is NOT correct?

• A) Analytical procedures are used to test the relationships among the account balances in the cycle, both to each other and to prior years.
• B) Tests of details of balances are used to verify ending account balances.
• C) Substantive tests of transactions are used both to test the effectiveness of internal controls and to test the dollar amount of these transactions.
• D) Tests of controls are used primarily to test the efficiency of internal controls over the five classes of transactions.

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Definitions:

Mass Consumption

A socioeconomic phase characterized by the widespread purchase and use of goods and services by a large number of people in a society.

Mass Producer

A mass producer is a company or individual that manufactures goods in large quantities using standardized processes, usually to meet widespread consumer demand.

Productivity

A measure of the efficiency of production, often quantified as the ratio of output to inputs used in the production process.

Wage Rates

The standard amount of compensation given to employees for their services, usually expressed per hour or year.