The Primary Audit Objectives to Focus on When Auditing Accounts

question 79

Multiple Choice

The primary audit objectives to focus on when auditing accounts in the capital acquisition and repayment cycle are

• A) accuracy and completeness.
• B) accuracy and existence.
• C) completeness and valuation.
• D) accuracy and valuation.

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Definitions:

Variable Costs

Expenses that change in proportion to the level of production or sales activity.

Contribution Margin

The difference between the sales revenue of a product and the variable costs associated with its production and sales.

Unit Contribution Margin

The amount that the sale of one unit contributes towards covering fixed costs, calculated as the sales price per unit minus variable costs per unit.

Net Income

The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.