In Many Audits of Sales Transactions Substantive Tests of Transactions

question 137

Multiple Choice

In many audits of sales transactions substantive tests of transactions can be reduced in determining the completeness objective because

• A) understatements of assets and income are a greater concern than overstatements.
• B) overstatements of assets and income are a greater concern than understatements.
• C) it doesn't matter if income is understated because the savings on income tax offsets the reduced revenue and net income is correct.
• D) the unrecorded sales cause a reduction of accounts receivable; therefore, the ratios of the two financial statements will not be misleading.

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Definitions:

Hyperpolarization

An increase in a cell's membrane potential, making it more negative and less likely to fire an action potential.

Voltage-Gated

Pertaining to ion channels that open or close in response to changes in membrane potential, crucial for nerve impulse conduction.

Na+

Na+ represents Sodium ions, which are essential electrolytes in the body that help maintain blood pressure, fluid balance, and are critical for the functioning of muscles and nerves.

Extracellular

Pertaining to being outside the cell membrane.