The Valuation and Allocation Assertion Relates to Which of the Following

question 38

Multiple Choice

The valuation and allocation assertion relates to which of the following audit objectives?

• A) All accounts payable on the balance sheet are real accounts payable for goods received or services performed.
• B) All accounts payable owed by the entity at year-end are included on the balance sheet.
• C) Accounts payable are stated at the amounts owed at year-end.
• D) Accounts payable are properly classified, described and disclosed in the financial statements.

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Definitions:

Dollar Sales

The total monetary value of sales transactions within a specific period, expressed in dollars.

Profit and Loss Statement

A financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a fiscal quarter or year, also known as an income statement.

Activity-Based Costing

A costing method that assigns overhead and indirect costs to specific products or services based on the actual activities and resources used in the production or delivery process.

Break-Even Point

The point at which total costs equal total revenues, meaning no net profit or loss is realized.