When Testing a Computerized Accounting System,which of the Following Is

question 25

Multiple Choice

When testing a computerized accounting system,which of the following is false regarding the test data approach?

• A) The test data need to consist of only those valid and invalid conditions in which the auditor is interested.
• B) Only one transaction of each type needs be tested.
• C) Test data are processed by the client's computer programs under the auditor's control.
• D) The test data must consist of all possible valid and invalid conditions.

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Definitions:

Financing Activities

Transactions related to a company's raising or repaying capital, such as issuing shares, paying dividends, or taking on new loans.

Cash Dividends

Money distributed by a corporation to its shareowners, frequently as a dividend from profits.

Operating Activities

Transactions and other events that are not investing or financing activities, usually involving the production and delivery of goods and services.

Indirect Method

A method used in cash flow statement preparation that adjusts net income for the changes in balance sheet accounts to calculate the cash from operating activities.