Auditors Are More Concerned with the Occurrence Assertion for Revenues

question 56

Multiple Choice

Auditors are more concerned with the occurrence assertion for revenues than the completeness assertion because:

• A)entities are more likely to overstate than understate revenues.
• B)entities are more likely to understate than overstate revenues.
• C)it is difficult to determine when services have been performed.
• D)the allowance for doubtful accounts often is understated.

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Definitions:

Interest Rate

Lenders require a payment, portrayed as a percentage of the principal, from borrowers for the use of their assets.

Loanable Funds

The market where savers supply funds for loans to borrowers, often facilitated by financial institutions, impacting the interest rates and investment in the economy.

Government Budget Deficit

The financial situation where a government's expenditures exceed its revenues within a specific fiscal period, leading to borrowing or debt accumulation.

National Saving

The total income in an economy that remains after deducting consumption expenditures and government spending.