The Audit Procedures for the Subsequent Events Review Can Be

question 100

Multiple Choice

The audit procedures for the subsequent events review can be divided into two categories: ? (1) procedures normally integrated as a part of the verification of year-end account balances,and (2) those performed specifically for the purpose of discovering subsequent events.Which of the following procedures is in the second category?

• A)Correspond with attorneys.
• B)Test the collectability of accounts receivable by reviewing subsequent period cash receipts.
• C)Subsequent period sales and purchases transactions are examined to determine whether the cutoff is accurate.
• D)Compare the subsequent-period purchase price of inventory with the recorded cost as a test of lower of cost or market valuation.

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Definitions:

Cash Receipts

The total amount of money received by a company during a given period, from its various sources of income including sales, interest, dividends, and other revenues.

Accounting Sales

Refers to the revenue generated from the sale of goods or services, recognized in the financial statements of a company.

Project Analysis

The process of examining the feasibility and potential return on investment of a project before committing resources.

Opportunity Cost

Opportunity cost represents the benefits an individual, investor, or business misses out on when choosing one alternative over another.