The Following Audit Procedure Tests Primarily Which Balance-Related Audit Objective

question 30

Multiple Choice

The following audit procedure tests primarily which balance-related audit objective for accounts receivable: review accounts receivable trial balance for large and unusual receivables.

• A) existence
• B) completeness
• C) classification
• D) all of the above

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Definitions:

Equity Method

An accounting technique used by companies to assess earnings generated by their investments in other companies, incorporating these earnings as part of their income.

Common Stock

Equity ownership in a corporation, providing voting rights and a share in the company's profits through dividends.

Stockholders' Equity

Stockholders' equity, also known as shareholders' equity, reflects the ownership value remaining in a company after all liabilities are deducted from total assets.