Which of the Following Audit Tests Both Have the Effect

question 35

Multiple Choice

Which of the following audit tests both have the effect of simultaneously verifying balance sheet and income statement accounts?

• A)Analytical procedures and substantive tests of transactions
• B)Tests of controls and substantive tests of transactions
• C)Tests of details of balances and substantive tests of transactions
• D)Tests of controls and analytical procedures

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Definitions:

Semiannual Payments

Payments made twice a year, often used in the context of bond interest payments or certain types of loans.

Compounded Semiannually

Interest calculation method where interest is added to the principal sum of a deposit or loan twice a year, resulting in interest earning interest.

Compounded Annually

A method of calculating interest where the interest earned each year is added to the principal, leading to an increase in the amount of interest earned in subsequent years.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in discounting and investment appraisal.