Reviewing Sales Invoices and Asking a Sales Manager to Explain

question 31

Multiple Choice

Reviewing sales invoices and asking a sales manager to explain why a price deviation occurred is an example of which audit testing procedure(s) :

• A) observation.
• B) inquiry.
• C) inspection.
• D) Both b and c

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Definitions:

Flows of Funds

The movements of money between sectors of an economy, showing how funds are used and where they come from.

Net Income

The profit of a company after all expenses and taxes have been deducted from total revenue.

Balance of Payments

A financial statement that summarizes a country’s transactions with the rest of the world, including imports, exports, and capital flows.

Credit Item

An entry that increases the balance in a bank account or financial statement, signifying an inflow of funds.