An Auditor Most Likely Would Limit Substantive Tests of Sales

question 23

Multiple Choice

An auditor most likely would limit substantive tests of sales transactions when control risk is assessed as low for the existence or occurrence assertions concerning sales transactions and the auditor has already gathered evidence supporting:

• A)opening and closing inventory balances.
• B)cash receipts and accounts receivable.
• C)receiving activities.
• D)cutoffs of sales and purchases.

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Definitions:

Future Value

Future Value is the estimated amount of money an investment is projected to be worth at a specific date in the future, taking into account factors like interest rates or earnings.

Compounded Semiannually

The process of applying interest to both the initial principal and accumulated interest over two periods within a year.

Present Value

The valuation today of a future financial sum or series of cash movements, taking into account a predetermined return rate.

Future Value

The estimated value of a current asset or amount of money at a specified date in the future, taking into account factors like interest rates or stock growth.