Which of the Following Is a Test of Controls for the Transaction

question 58

Multiple Choice

Which of the following is a test of controls for the transaction assertion of completeness for revenue?

• A)Test a sample of sales invoices for authorized customer orders.
• B)Review sales orders for proper credit approval.
• C)Trace shipping documents to sales invoices and the sales journal.
• D)Examine reconciliation of subsidiary ledger to general ledger control account.

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Definitions:

Factory Overhead

Indirect manufacturing costs not directly linked to the production of goods, such as rent, utilities, and maintenance.

Direct Materials

Raw materials that can be directly traced to the production of a specific product.

Direct Labor

The labor or work performed by employees who are directly involved in the production of goods or services.

Nonmanufacturing Cost

Expenses not directly tied to the production of goods, such as administrative, sales, and marketing costs.