When Assessing Accounts for Misstatement, the Auditor Frequently Sets Tolerable

question 41

True/False

When assessing accounts for misstatement, the auditor frequently sets tolerable limits to guide her decisions regarding the need for adjusting journal entries.

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Definitions:

Withdrawals Account

An account used to track the money that an owner takes out of the business for personal use, also known as draws.

Capital Account

A financial statement that shows the changes in a company's equity, including contributions by and distributions to owners over a period.

Withdrawals Account

A record of the money taken out of a business by its owner(s) for personal use.

Income Summary

A temporary ledger account used in the closing process to summarize the year's revenues and expenses before transferring the net income or loss to the owner's equity account.