When Comparing an Initial Audit with a Subsequent Year Audit

question 33

Multiple Choice

When comparing an initial audit with a subsequent year audit for a particular client,the scope of audit procedures for which of the following accounts would be expected to decrease the most?

• A)Accounts receivable.
• B)Cash.
• C)Marketable securities.
• D)Property,plant,and equipment.

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Definitions:

Withdrawals

Money taken out from a bank account, or the act of taking out funds from a business by its owners for personal use.

Expenses

Outflows or other uses of assets or incurrences of liabilities during a period from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity's ongoing major operations.

Formal Account

An organized financial record of transactions over a period for an individual, company, or entity, maintained in a structured format.

Standard Account Form

A uniform format for presenting accounting information, typically including assets, liabilities, and equity sections.