When Using the Cycle Approach to Segmenting the Audit, the Reason

question 154

Multiple Choice

When using the cycle approach to segmenting the audit, the reason for treating capital acquisition and repayment separately from the acquisition of goods and services is that

• A) the transactions are related to financing a company rather than to its operations.
• B) most capital acquisition and repayment cycle accounts involve few transactions, but each is often highly material and therefore should be audited extensively.
• C) Both A and B are correct.
• D) Neither A nor B is correct.

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Definitions:

Herbivory

The act of eating plants or plant parts by animals, which can significantly influence plant population and community structure.

Parasitize

To live as a parasite in or on another organism, deriving nutrients at the host's expense without offering any beneficial return.

Diploid

Referring to cells that contain two complete sets of chromosomes, one from each parent, characteristic of the body's somatic cells.

Tetraploid

An organism or cell having four complete sets of chromosomes, a condition that can result from the doubling of chromosomal number.