Which of the Following Balance-Related Audit Objectives Is Not Applicable

question 69

Multiple Choice

Which of the following balance-related audit objectives is not applicable to the audit of notes payable?

• A)Realizable value
• B)Detail tie-in
• C)Cutoff
• D)Classification

---

Definitions:

Normal Return

The minimum profit necessary to keep a factor of production in its current use, essentially the opportunity cost of using resources.

Investment

The allocation of resources, such as capital or time, into a venture with the expectation of generating future returns.

Retained Earnings

The portion of net income that is not distributed to shareholders but instead reinvested back into the company.

Tangible Capital

Physical assets owned by a firm that are used in the production process, such as buildings, machinery, and equipment.