In Many Audits of Sales Transactions, No Substantive Tests of Transactions

question 63

Multiple Choice

In many audits of sales transactions, no substantive tests of transactions are performed for the completeness objective because:

• A) understatements of assets and income are a greater concern than overstatements.
• B) it doesn't matter if income is understated, because the savings on income tax offsets the reduced revenue, so net income is correct.
• C) the unrecorded sales cause a reduction of accounts receivable; therefore, the ratios of the two financial statements will not be misleading.
• D) overstatements of assets and income are a greater concern than understatements.

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Definitions:

Embryonic

Relating to an embryo, which is the early developmental stage of animals or plants, often before birth or hatching.

Germ Line

Germ line refers to the sequence of cells that lead to the gametes (eggs and sperm), carrying the genetic material that can be inherited by offspring.

Subsequent Generations

Future generations that come after the current generation, highlighting considerations of long-term effects and sustainability of actions and policies.

Bonnie Steinbock

An ethicist known for her work in bioethics, specifically focusing on issues such as reproductive rights, parental responsibilities, and animal welfare.