If the Upper Limit on Misstatement Exceeds the Tolerable Misstatement,the

question 36

True/False

If the upper limit on misstatement exceeds the tolerable misstatement,the auditor could not initially conclude that the account balance is fairly recorded.

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Definitions:

Revenue Account

An account that tracks the income earned by a company from its operational activities, excluding expenses.

Fees Earned Account

An income account that records the revenue earned from services provided or fees charged.

Capital Account

An account on the balance sheet representing the cumulative amount of the company's earnings, investment, or losses.

Income Summary

An account in the ledger used to summarize revenues and expenses for a period, helping to determine the net income or loss.