The Test Objective for a Substantive Test Is to Determine

question 49

Multiple Choice

The test objective for a substantive test is to determine

• A)if the account balance or class of transactions is correctly stated
• B)if the account balance or class of transactions is materially misstated
• C)if the sample selected was appropriate for the audit
• D)if the sample resulted in the expected deviation rate

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Definitions:

Accounting Equation

The fundamental principle of accounting that states assets equal liabilities plus owner's equity, serving as the foundation of the double-entry bookkeeping system.

Customer on Account

Transactions where a customer purchases goods or services on credit, creating an account receivable for the business.

Financial Statement

A formal record of the financial activities of a business, person, or other entity, presenting its financial performance and position at a given point in time.

Specific Date

A particular day singled out from others because of its significance or relevance to an event or action.