Favorable Results from Analytical Procedures May Reduce the Extent to Which

question 21

True/False

Favorable results from analytical procedures may reduce the extent to which the auditor needs to test details of balances.

---

Definitions:

T-Accounts

Diagrammatic representations used in accounting to visualize debits and credits for individual accounts.

Direct Labor-Hours

A measure of the total hours of work directly involved in manufacturing goods or providing services.

Predetermined Overhead Rate

This is a calculated figure used to allocate manufacturing overhead costs to products based on a relevant activity such as machine hours or labor hours, set before the accounting period starts.

Direct Materials

Materials directly linked to the creation of certain products or services.