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:

Anterior Cingulate Cortex

A part of the brain located in the frontal lobe, involved in processing emotions, decision making, and impulse control, among other functions.

Socially Excluded

Describes individuals or groups that are systematically denied participation in social, economic, or political activities within their community or society.

A-delta Fibers

A-delta Fibers are fast-conducting nerve fibers that transmit sharp, immediate pain to the brain, playing a crucial role in the body's pain response system.

Myelinated

Refers to nerve fibers covered by a myelin sheath, which increases the speed at which electrical impulses are transmitted along the nerve cells.