Which of the Following Areas Are Tested as Part of the Audit

question 15

Multiple Choice

Which of the following areas are tested as part of the audit of the acquisition and payment cycle?

• A) payment for raw materials, receipt of raw materials, shipment of goods to customers
• B) processing of sales orders, production of goods for clients, and subsequent invoicing
• C) processing supplier invoices, vendor master file changes, shipment of goods to customers
• D) processing purchase orders, vendor master file changes, receiving goods and services

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Definitions:

Adjusted Gross Income (AGI)

A calculation derived from your total earnings to ascertain the taxable portion of your income.

Deductions and Credits

Financial tools allowed by tax law to reduce taxable income or the tax itself, with deductions lowering taxable income and credits directly reducing the tax payable.

Maximum Penalty

The highest possible financial charge or punishment that can be imposed for a violation of a rule or law.

Failure to File

The failure of an individual or business to submit their tax return by the due date, which can result in penalties and interest charges.