ABC Company Had a Major Sale to XYZ Company

question 59

Short Answer

ABC Company had a major sale to XYZ Company.This sale accounted for 20% of the revenue of ABC Company.The auditors performed the audit procedures listed 1-3.For each audit procedure select the ASB transaction assertion that is most likely being tested.
A.Occurrence
B.Completeness
C.Cutoff
D.Accuracy
E.Classification
1.The auditor reviewed the shipping documents to check the date that product was shipped to XYZ Company.
2.The auditor reviewed the shipping documents to ensure that all product included in the sales revenue to XYZ had been shipped.
3.The auditor reviewed the invoice sent to XYZ Company to ensure that XYZ had been properly billed.

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Definitions:

Retention Ratio

This metric indicates the percentage of net income a firm retains to reinvest in its business rather than distributing to shareholders as dividends.

Dividend Payout Ratio

The fraction of earnings a company pays out to its shareholders in the form of dividends.

Cash Dividends

Distributions of a company's earnings to shareholders in the form of cash.