An Example of a Substantive Test Always Performed for Costs

question 4

True/False

An example of a substantive test always performed for costs and expenses is obtaining
detailed analysis of selected accounts and tracing the details to the source data.

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Definitions:

Comparative Statement of Income

A financial statement presenting a company's revenues, expenses, and profits over multiple periods for comparison purposes.

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is actually received or paid out, as opposed to when they are incurred.

Cost Of Goods Sold

Expenses directly linked to creating products sold by a business, which include labor and materials.

Cash Paid

Cash paid encompasses any outflow of cash from a company or individual for various purposes, including expenses, acquisitions, or investments.