When Using the Cycle Approach to Segmenting the Audit, the Reason

question 154

Multiple Choice

When using the cycle approach to segmenting the audit, the reason for treating capital acquisition and repayment separately from the acquisition of goods and services is that

• A) the transactions are related to financing a company rather than to its operations.
• B) most capital acquisition and repayment cycle accounts involve few transactions, but each is often highly material and therefore should be audited extensively.
• C) Both A and B are correct.
• D) Neither A nor B is correct.

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Definitions:

Afferent Nerves

Afferent nerves are sensory nerves that carry information from sensory organs and structures of the body to the brain and spinal cord.

Olfactory Nerves

Cranial nerves responsible for conveying sensory information regarding smells from the nose to the brain, playing a crucial role in the sense of smell.

Auditory Nerves

The cranial nerves that transmit sound information from the inner ear to the brain for auditory processing.

Plasticity

The ability of the brain to change and adapt in response to new experiences, learning, or damage.