The Most Reliable Evidence from Confirmations Is Obtained When They

question 41

Multiple Choice

The most reliable evidence from confirmations is obtained when they are sent

• A) as close to the balance sheet date as possible.
• B) at various times throughout the year to different segments of the sample, so that the entire sample is representative of account balances scattered throughout the year.
• C) several months before the year-end, so the auditor will have adequate time to perform alternate procedures if they are required.
• D) at various times throughout the year to the same group in the sample, so that the sample will not have a time bias.

---

Definitions:

Total Cost

The sum of all the expenses incurred in producing a good or service, including both fixed and variable costs.

Average Cost

The cost per unit of output, calculated by dividing the total cost of production by the number of units produced.

Marginal Cost

The additional cost incurred in producing one more unit of a good or service.

Variable Cost

Costs that change in proportion to the level of production or sales activity of a business.