A CPA Examines a Sample of Copies of December and January

question 16

Multiple Choice

A CPA examines a sample of copies of December and January sales invoices for the initials of the person who verified the quantitative data. This is an example of a:

• A) Test of a control.
• B) Substantive test.
• C) Cutoff test.
• D) Statistical test.

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Definitions:

Borrowed

Describes money that has been taken from another party with the agreement that it will be repaid, typically with interest.

Daily Interest

Interest calculation method where the interest is accrued daily.

Savings Account

A bank account where money is kept so that it can earn interest over time, typically used for holding funds that are not needed for daily expenses.

Annual Simple Interest

Interest calculated once a year on the principal sum, without compounding.