While Auditing the Sales System of Candle Pty Ltd You

question 41

Multiple Choice

While auditing the sales system of Candle Pty Ltd you have determined that there is a risk of sales being misstated, and that this potential misstatement is associated with the completeness assertion.Which of the following would be an appropriate audit response to this assessed risk?

• A)For all debtors greater than 30 days overdue, evaluate whether there is appropriate correspondence with the debtor to encourage repayment of the debt.
• B)Select a sample of sales invoices and test to related shipping documents.
• C)Select a sample of shipping documents test to related sales invoices and the sales journal.
• D)Ensure that the sales order is appropriately authorised.

Identify the differences between types of income and how they are taxed.

Recognize various forms of tax assistance and fraud threats.

Understand the changes in tax laws and their effects on taxpayers.

Distinguish between tax-exempt and tax-deferred income.

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Definitions:

Marginal Product

The increase in output resulting from a one-unit increase in the input of a production factor, holding all other inputs constant.

Marginal Product

The additional output resulting from one more unit of a given input, holding all other inputs constant.

Average Product

The output per unit of input, measured by dividing the total product by the quantity of input.

Average Product

The output per unit of input, calculated by dividing total production by the number of units of input.