All of the Following Are Inherent Risk Factors That Are

question 1

Multiple Choice

All of the following are inherent risk factors that are pervasive to the financial statements except:

• A) Highly complex significant transactions.
• B) Non-routine transactions.
• C) Classes of transactions are not processed systematically.
• D) Supplies inventory is difficult to count.

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Definitions:

Gain or Loss

The financial result from a transaction that leads to an increase (gain) or decrease (loss) in the asset value of a company.

Straight-line Amortization

A method of evenly spreading out the cost of an intangible asset over its useful life.

Interest Payment

The amount paid at regular intervals (often annually or semi-annually) on a debt instrument such as a bond or loan, based on the interest rate and the principal amount.

Discount on Bonds Payable

Represents the difference when bonds are sold for less than their face (or par) value, indicating that the bond's market rate of interest is higher than its coupon rate.