The Tests That an Auditor Uses to Gather Evidence Relating

question 95

Multiple Choice

The tests that an auditor uses to gather evidence relating to income statement transactions are

• A)substantive tests of balances
• B)tests of controls
• C)substantive tests of transactions
• D)substantive tests of accounts

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Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including materials and labor.

Estimated

An approximation or informed guess of a value, quantity, or outcome based on available data.

Budgeted Accounts Receivable

Predicts the amount of money owed to a business by its customers for sales made on credit during a specific period.

Collections

The process of gathering money that is owed by customers, often in relation to accounts receivable.