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:

Elastic Manner

Describes a response to deformation where a material returns to its original shape after the stress causing the deformation is removed.

Subduction Zone

A region on Earth where one tectonic plate moves under another, often causing earthquakes and volcanic activity.

Transform Boundary

A type of plate tectonic boundary where two plates slide past each other horizontally, commonly associated with earthquakes.

Divergent Plate Boundary

A tectonic margin where two lithosphere plates are moving apart from each other, typically resulting in the formation of new oceanic crust through volcanic activity.