Monetary-Unit Sampling Should Not Be Used If

question 27

Multiple Choice

Monetary-unit sampling should not be used if:

• A)the population includes several large items.
• B)the auditor expects overstatement errors.
• C)many items in the account are expected to have errors.
• D)no items in the account are expected to have errors.

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Definitions:

Reversing Entries

Journal entries made at the beginning of an accounting period to reverse or cancel out adjusting entries made at the end of the previous period.

Adjusting Entries

Bookkeeping adjustments made before the preparation of financial statements to account for accruals and deferrals not recorded through daily transactions.

Optional

Optional refers to a choice or item that is not mandatory and can be selected based on preference or requirement.

Adjusting Entries

These are journal entries made in accounting at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.