Tests of Controls for the Occurrence Assertion for Purchases Include

question 41

Multiple Choice

Tests of controls for the occurrence assertion for purchases include all of the following except:

• A) Evaluating proper segregation of duties.
• B) Testing a sample of vouchers for an authorized purchase order.
• C) Testing a sample of vouchers for matching receiving reports.
• D) Tracing a sample of vouchers to purchases journal.

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Definitions:

Sold at a Discount

refers to selling something for less than its usual or advertised price, often to encourage quick sales or because the item is slightly damaged or outdated.

Revolving Credit

A credit line allowing the borrower to use, repay, and reuse funds up to a certain limit.

Guaranteed Line

A credit line that is assured to be available to the borrower by the lender, typically used to ensure liquidity for businesses.

Compensating Balances

Minimum cash balances that a business agrees to maintain in its account as part of a loan agreement, often used to reduce the lender's risk.