Which of the Following Is a Substantive Test of Transactions

question 30

Multiple Choice

Which of the following is a substantive test of transactions?

• A) Review personnel policies.
• B) Account for a sequence of payroll checks.
• C) Reconcile the disbursements in the payroll journal with the disbursements on the payroll bank statement.
• D) Examine printouts of transactions rejected by the computer as having invalid employee IDs.

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Definitions:

Dishonored

A term used when an instrument such as a check is not accepted or paid upon presentation.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered or used but not yet paid for.

Short-Term Notes Receivables

Short-duration financial assets representing amounts owed to a company that must be paid within a year.

Allowance Account

An accounting practice used to create a buffer for potential future losses on receivables, also known as a provision for doubtful debts.