An Auditor Testing Long-Term Investments Would Ordinarily Use Substantive Analytical

question 12

Multiple Choice

An auditor testing long-term investments would ordinarily use substantive analytical procedures as the primary audit evidence to support the reasonableness of the

• A) Valuation of marketable equity securities.
• B) Classification of gains and losses on the disposal of securities.
• C) Completeness of recorded investment income.
• D) Existence and ownership of investments.

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Definitions:

Landlord

An individual or entity that rents out real estate to tenants.

Deferred Revenue

Money received by a company for goods or services which have not yet been provided, recorded as a liability on the balance sheet until the services are rendered or goods are delivered.

Adjusting Entry

A journal entry made at the end of an accounting period to update the accounts and ensure they reflect all revenues earned and expenses incurred during the period.