In Performing Variables Sampling,the Auditor Will Conclude That the Account

question 58

Multiple Choice

In performing variables sampling,the auditor will conclude that the account balance is not materially misstated if the ____ is less than or equal to ____.

• A) upper limit on misstatement; tolerable misstatement
• B) expected error; tolerable misstatement
• C) tolerable misstatement; upper limit on misstatement
• D) tolerable misstatement; expected error

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Definitions:

Adjusting Entry

An accounting record created at the close of an accounting period to distribute expenses and revenue to the correct period.

Straight-Line Depreciation

A technique that distributes the expense of a physical asset evenly over its lifetime in yearly installments.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, calculated as beginning inventory plus purchases minus cost of goods sold.

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenues, indicating the actual profitability of the company over a specified time period.