Which One of the Following Is of the Least Concern

question 4

Multiple Choice

Which one of the following is of the least concern to the auditor when designing substantive tests of transactions for the sales/collection cycle?

• A)Sales being included in the journal for which no shipment was made
• B)Sales to related parties, such as officers and subsidiaries
• C)Sales recorded more than once
• D)Shipments being made to nonexistent customers and recorded as sales

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Definitions:

Common Stock

Equity ownership in a corporation, granting shareholders voting rights and a share in the company's profits via dividends, pertaining to the fundamental stake in the company’s equity.

Cash Dividend

A distribution of profits by a corporation to its shareholders in the form of cash.

Cash

Money in the form of coins or banknotes, especially that held by a person or business.

Stock Investments

Financial assets referring to shares purchased in other companies intended for income generation or capital gains.