In Many Audits, No Substantive Tests of Transactions Are Made

question 120

Multiple Choice

In many audits, no substantive tests of transactions are made for the ________ assertion on the grounds that understatement of sales is not a concern.

• A) accuracy
• B) existence
• C) completeness
• D) none of the above

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Definitions:

Coupon Interest Rate

The annual interest rate paid on a bond, expressed as a percentage of the face value, and paid periodically until the bond matures.

Premium

Premium can refer to the amount paid for insurance coverage in excess of the face value or to the additional amount paid over the nominal or par value of a security.

Operating Line of Credit

A flexible loan from a bank that allows a business to borrow up to a certain limit to support its operational expenses.

Negative Cash Balance

A scenario where a company's cash account has a deficit, indicating that it has issued checks in excess of its actual cash available.