The Audit Objective That All Transactions and Accounts That Should

question 41

Multiple Choice

The audit objective that all transactions and accounts that should be presented in the financial statements are in fact included is related to which of the PCAOB assertions?

• A)Existence.
• B)Rights and obligations.
• C)Completeness.
• D)Valuation.

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Definitions:

Indirect Method

An approach to preparing the cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash from operating activities.

Operating Activities

The section of a business's cash flow statement that accounts for its core business operations' cash inflows and outflows, involving receipts from sales, payments to suppliers, and payroll.

Prepaid Expenses

Costs that have been paid in advance for goods or services to be received in the future, recorded as an asset on the balance sheet.

Net Income

The remaining profit after deducting all operating expenses, taxes, and additional costs from the total revenue.