When Auditing the Revenue and Collection Cycle, Auditors Normally Select

question 54

Multiple Choice

When auditing the revenue and collection cycle, auditors normally select balances to confirm from the:

• A)sales journal.
• B)accounts receivable listing.
• C)general ledger.
• D)cash receipts listing.

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Definitions:

Incapacitation

A state of being unable to act or make legal decisions due to physical or mental limitations.

Undisclosed Principal

A principal whose existence is not known by a third party. That is, the third party does not know that an agent is acting on behalf of a principal.

Agent

An individual or entity authorized to act on behalf of another (known as the principal) in dealings with third parties, creating a legal relationship called agency.

Authority

The power or right to give orders, make decisions, and enforce obedience, or a person or organization having such power.