Your Audit Client Is Under Intense Pressure to Meet an Earnings

question 62

Multiple Choice

Your audit client is under intense pressure to meet an earnings target.Which transaction assertion for purchases is most at risk?

• A)Occurrence.
• B)Completeness.
• C)Classification.
• D)Accuracy.

Understand the rules for revenue recognition in governmental accounting.

Comprehend the classification and reporting of fund balances in governmental funds.

Recognize the different fiduciary funds and their usage in governmental accounting.

Understand the implications of specific decisions (e.g., city council decisions) on fund balance designations.

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Definitions:

Excise Tax

A tax levied on specific goods, services, or transactions, often included in the price of the product, such as alcohol, tobacco, and gasoline.

Borne

The bearing or enduring of costs, responsibilities, or consequences by an entity, often in the context of who ultimately pays for or suffers from economic decisions.

Progressive

A political and social philosophy advocating for reforms and innovations aimed at addressing inequalities and improving the welfare of the population.

Relatively More

A comparative term indicating that something is greater in amount, quantity, or degree when compared with another thing.