Key Controls Are Those ________

question 15

Multiple Choice

Key controls are those ________.

• A) over significant risks
• B) over physical access
• C) on which the auditor intends to rely
• D) designed by the audit committee to prevent management fraud

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Definitions:

Debit Memorandum

A document issued by a buyer to a seller indicating returned goods or a request for a price reduction, increasing the buyer's accounts payable.

Sales Returns and Allowances

A reduction in sales revenue for returned goods or provided allowances due to dissatisfaction or defects.

Merchandise Inventory

Goods that a merchandising company holds for the purpose of resale to customers in the ordinary course of business.

Freight Charges

Costs associated with transporting goods from one place to another, typically paid by the buyer or seller depending on the shipping terms.