Analytical Procedures

question 101

Multiple Choice

Analytical procedures

• A) focus on the ending balances for income statement accounts.
• B) are only performed during the planning stage of the audit.
• C) are required to be performed when auditing an account balance.
• D) provide substantive evidence.

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Definitions:

Prepaid Insurance

An asset account that represents the amount of insurance premium payments made in advance and has not yet expired at the balance sheet date.

Prepaid Rent

An expense that is paid in advance for the use of property or equipment, which is then recognized as an expense over the period of use.

Rent Expense

The cost incurred from renting property or equipment, recognized as an expense on the income statement.

Accounts Receivable

Money owed to a business by its customers for products or services delivered on credit.