When Evaluating the Risk of Material Misstatement with Regards to Defalcations

question 67

Multiple Choice

When evaluating the risk of material misstatement with regards to defalcations involving receivables (a credit entry to accounts receivable for amounts not received) , the auditor would expect an experienced bookkeeper to most likely debit which of the following accounts?

• A)Cash.
• B)Sales returns.
• C)Miscellaneous income.
• D)Accounts payable.

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Definitions:

Measurement

The process of obtaining quantitative data or the numerical description of a property of an object or event, by using instruments or techniques.

Split the Stems

A technique in stem-and-leaf plot creation where each stem is divided to improve data resolution.

Stemplot

A graphical method for displaying quantitative data, typically smaller datasets, to visualize its distribution, also known as a stem-and-leaf plot.

Potential Outlier

An observation in a dataset that is significantly different from the rest, possibly indicating an error or a unique case.