Whenever an Auditor Compares Client Data to Client-Prepared Budgets, There

question 33

Multiple Choice

Whenever an auditor compares client data to client-prepared budgets, there are two special concerns.Indicate if the two items below are concerns.

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Definitions:

Incurred

Refers to costs or expenses that have been consumed or utilized in the process of generating revenue.

Accrual-Basis Accounting

A bookkeeping approach that documents income and expenditures at the time they are accrued, irrespective of the actual cash transaction timing.

Revenue Recognition Principle

The Revenue Recognition Principle is an accounting guideline that determines the specific conditions under which revenue is recognized or accounted for.

Expense Recognition Principle

An accounting principle that expenses should be recognized in the period in which they are incurred, matching expenses with related revenues.