An Auditor Traced a Sample of Purchase Orders and the Related

question 54

Multiple Choice

An auditor traced a sample of purchase orders and the related receiving reports to the purchases journal and the cash disbursements journal. The purpose of this substantive procedure most likely was to:

• A)identify unusually large purchases that should be investigated further.
• B)verify that cash disbursements were for goods actually received.
• C)determine that purchases were properly recorded.
• D)test whether payments were for goods actually ordered.

---

Definitions:

Profit

The profit achieved when the revenue from business operations surpasses the combined total of expenses, costs, and taxes needed to maintain those operations.

Loss

Loss refers to the negative financial result that occurs when expenses exceed revenues or costs outweigh benefits in a transaction or operation.

Service

An intangible economic activity that satisfies a need or wants, often performed by humans or automated systems.

Ambience

The character and atmosphere of a place, often related to its visual and environmental qualities that contribute to its overall feel.